Chapter 02 · Section 2.1
Exchange traded options
The premium(or price of the option) is the compensation paid by the option buyer to the option seller (or option writer).
The exercise price is the price at which the underlying asset will change hands if the option holder decides to exercise the option.
Which of the following contract terms of exchange-traded options is not standardized or fixed?
d) Premium
Yes. The premium is the price paid for the option. Since this price fluctuates in the market place, it is not standardized.Continue
a) Contract size
b) Exercise price
c) Expiration
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