Chapter 02 · Section 2.1

Option premiums - Q4

An option premium is paid:

a) when the option is exercised.
• b) when the option transaction takes place.
  Yes. More precisely, the premium payment date is the same as the transaction date for exchange-traded options, and usually one or two business days after the transaction date for OTC options. (N.B. There are also exchanges where premiums are margined.) Continue
  c) when the option transaction takes place and is refunded when the option is exercised.

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