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 1. The total cost of an option. 2. The difference between the higher price paid for a fixed-income security and the security's face amount at issue. |
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 1. The premium of an option is basically the sum of the option's intrinsic and time value. It is important to note that volatility also affects the premium. 2. If a fixed-income security (bond) is purchased at a premium, existing interest rates are lower than the coupon rate. Investors pay a premium for an investment that will return an amount greater than existing interest rates. |
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 Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them. Introduction to Put Writing - Learn about a strategy that may be appropriate if you have a positive outlook on a stock. Advanced Bond Concepts - This detailed tutorial explains some of the more complex concepts and calculations you need to know for trading bonds, including bond pricing, yield, term structure of interest rates, duration, and much more. How Does Your Margin Grow? - Risk-management tool SPAN margin boosts profitability prospects by helping to determine when to exit a trade. |
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