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Premium income |
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Premium incomeThe income received by an investor who sells an option.Premium income Similar MatchesPremiumPremiumThe extra amount you pay for a security over and above its intrinsic value. For example: Warrants: the premium on a warrant is calculated as the price of the warrant minus the difference between the exercise price and the price of the underlying asset. So if a warrant costing 8p gives you the right to buy a share at 75p, and that share was currently trading at 70p, the premium would be 3p (8-5). Investment trusts: the premium is the amount by which the share price of the investment trust exceeds its net asset value per share. e.g. If the Net Asset Value is £3.00, and the share price of the trust is £3.30, the trust is trading at a 10% premium to its NAV. In the more common situation where the share price is below the net asset value, the trust is said to be trading at a discount. Term premiumsTerm premiumsExcess of the yields to maturity on long-term bonds over those of short-term bonds. Option premiumOption premiumThe 'price' of the option, paid by the buyer. High premium convertible debentureHigh premium convertible debentureA bond with a long-term, high-premium, common stock conversion feature. It also offers a competitive interest rate. This type of investment vehicle is aimed at bond investors who want to be able to convert into stock to hedge against inflation. Life assurance premium reliefLife assurance premium reliefA tax relief of 15% on the premiums paid into long-term insurance policies. Applies only to policies lasting for more than 10 years and issued before March 13, 1984. Further SuggestionsCall premiumPremium Liquidity premium Premium bond Percentage premium Waiver of premium Option premium Fixed premium Default premium Single premium life insurance warrant premium single premium life insurance Unamortized premiums on investments Bond premium Risk premium waiver of premium Forward premium insurance premium tax Insurance premium premium bonds insurance premium Risk premium Single Premium Deferred Annuity (SPDA) equity risk premium Tender offer premium |
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