The amount of money needed to close out an option position. Premium margin is designed to cover the credit risk associated with a position. If an investor is shorting a stock, this premium would be the amount of money needed to close the position if the investor were to go into default. Premium margin and risk margin are the two components comprising the margin requirement.
Related information about premium margin:
- What is premium margin? definition and meaning - InvestorWords.com
Definition of premium margin: The amount of money needed to close out an option position. Premium margin is designed to cover the credit risk associated with ...
- Margin (finance) - Wikipedia, the free encyclopedia
This premium margin is equal to the premium that they would need to pay to buy back the option ... The value of the option is 14¢, so this is the premium margin.
- Options margins - Australian Securities Exchange - ASX
the premium margin is the market value of the particular position at the close of business each day. It represents the amount that would be required to close out ...
- Margins - ASX Clear - Australian Stock Exchange
components for each position: the premium margin and the risk margin. ... The premium margin is the market value of the particular position at the close of ...
- What is Premium margin? Definition and meaning - InvestorGuide.com
Premium margin - definition of Premium margin from InvestorGuide.com: current market value of an option that is traded on an exchange as figured by the ...
- NSE - National Stock Exchange of India Ltd.
The report gives a break up of Initial Margin and Premium Margin. Margin Statement of Trading Member/ Custodial Participant : MG-10. This report gives the ...
- Understanding Margins - Bombay Stock Exchange
In addition to Initial Margin, a Premium Margin is charged to trading members trading ... The premium margin is paid by the buyers of the Options contracts and is ...
- ECC - Glossary
There are five types of margins at ECC: the Initial Margin, the Premium Margin, the Additional Margin, the Spread Margin and the Delivery Margin.