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How is the option premium taxed?
The option premium is taxed as a capital gain when the option is sold or expires.
When do you receive option premium?
You receive option premium when you sell an option contract to another investor. The premium is the amount of money you receive upfront for taking on the obligation of the option contract.
Is the seller of the option retains the option premium whether or not the option is expired?
Yes, as soon as the option is sold on the open market to a buyer, the seller immediately receives and retains the option's premium. This premium is kept regardless of the action of the market or the buyer. In the event the option expires worthless, the premium becomes profit for the seller, or in contrast, the premium can be used to help offset loss if the seller decides to close the position and buy back the option. It is important to note, however, that the premium received remains in escrow and cannot be used in any capacity until the risk taken on by the trade is eliminated in due course by either the expiration of the option, or the buy back of the position.
If the money rate of interest is 10 percent and the real rate of interest is 7 percent the inflationary premium is?
The inflationary premium can be calculated by subtracting the real rate of interest from the nominal interest rate. In this case, if the money rate of interest is 10 percent and the real rate is 7 percent, the inflationary premium is 10% - 7% = 3%. Therefore, the inflationary premium is 3 percent.
When bonds are issued at a premium what is the affect on interest?
Bonds issued at a premium offer an interest rate that is above the market interest rate. Typically, a bond issuer offers a premium interest rate to offset higher risk associated with a bond offering that has a low credit rating. A purchaser of a bond offered at a premium will receive a higher interest rate but will incur a higher degree of credit risk.
When did premium bonds start?
Premium Bonds were introduced in the United Kingdom on November 1, 1956. They were created by the government as a way to encourage saving and provide a chance to win tax-free prizes instead of earning interest. Since their launch, Premium Bonds have become a popular savings option for many UK residents.
What are the two factors depend on expiration?
Expiration depends on the option premium and the intrinsic value. The option premium is the price paid for the option contract, while the intrinsic value is the difference between the current stock price and the strike price of the option.
What is a good alternative to Don Julio 1942 for a premium tequila option?
A good alternative to Don Julio 1942 for a premium tequila option is Clase Azul Reposado.
Does Capitol One offer a premium finance option?
No. This premium finance option is usually handled by another company. Capitol One does not lend funds for insurances such as life, etc. This is not the purpose of Capitol One. It is not a premium finance company.
Can you pay a one time fee for a life insurance policy?
Generally, most insurers do offer an option by which you can pay the entire premium at once. This is usually called, appropriately, "single pay". This is not applicable on all life policies.However, in most Ulip policies, Single Premium or one-time premium option is there. Specially in conventional policy, where single premium option is there, you gain by way of paying lesser amount in comparison to consolidated regular premium amount.
When must a long call option be sold to collect the premium?
Whenever you want. You collect the premium at the time you sell the call.
IF Covered Interest rate Parity says that interest rate differential equal?
forward/discount rate premium
