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The option price is called Premium. Option’s premium is defined by several factors, including his type (call or put), current basic price of the currency, strike-price of the option, left till the expiration date and volatility. Options premium is calculated on the basis of one lot. Option purchase is reflected as a debt in the amount of the premium on the buyer’s account. Trading platforms quote premium as the “option price” (option cost in points) and the “option cost” (the price is calculated in US Dollars).
What is options:
1. Options enable you to buy or to sell a basic instrument.
2. If you buy an option, you are not obliged to buy or sell a basic instrument, you just have such possibility.
3. Options are valid for some period of time. Once it’s over, you loose your possibility to buy or sell this instrument for a special price.
4. Once you buy an option, the amount of equal currency is being transferred from your account to the option’s owner’s one.
5. Options are available for several strike prices reflecting the cost of the basic tool.
Options price is known as premium. This value reflects different factors, like the option type, current tool price, time available before the expiration date and the volatility.
