premium

consideration paid for an insurance policy. Glossary of Business Terms
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(1) The additional payment allowed by exchange regulation for delivery of higher-than-required standards or grades of a commodity against a futures contract.
(2) In speaking of price relationships between different delivery months of a given commodity, one is said to be "trading at a premium" over another when its price is greater than that of the other. (3) In financial instruments, the dollar amount by which a security trades above its principal value. The price of an option the sum of money that the option buyer pays and the option seller receives for the rights granted by the option. Chicago Board of Trade glossary
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The price paid by a buyer to purchase an option. Premiums are determined by " open outcry" in the pits. The CENTER ONLINE Futures Glossary
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(1) The amount by which the price for a security is greater than its par amount.
(2) The amount that must be paid above the par amount for an issuer to call or refund an issue before its maturity.
(3) The amount paid to purchase an option.
(4 The cost of an insurance policy.
(5) In banking, the segment of an interest rate that is offered or paid by one issuer representing the difference between the rate offered or paid by that issuer and the rate that other issuers of the same type offer or pay for similar issues. For example, the extra or higher interest rate that a distressed bank must pay above rates offered by other banks in order to attract funds. American Banker Glossary
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(1) A bond sold above its par value. Bloomberg Financial Dictionary
(2) The price of an options contract; also, in futures trading, the amount by which the futures price exceeds the price of the spot commodity. Bloomberg Financial Dictionary
(3) For convertibles, amount by which the price of a convertible exceeds parity, and is usually expressed as a percentage. Suppose a stock is trading at $45, and the bond is convertible at a $50 stock price and the convertible bond trading at 105. A similar bond without the conversion feature trades at $90. In this case, the premium is $15, or 16.66%=(105-90)/90. If the premium is high, the bond trades like any fixed income bond; if low, like a stock. Bloomberg Financial Dictionary
See: gross parity, net parity. Bloomberg Financial Dictionary
(4) For futures, excess of fair value of future over the spot index , which in theory will equal the Treasury bill yield for the period to expiration minus the expected dividend yield until the future's expiration. Bloomberg Financial Dictionary
(5) For options, price of an option in the open market (sometimes refers to the portion of the price that exceeds parity). Bloomberg Financial Dictionary
(6) For straight equity, price higher than that of the last sale or inside market. Bloomberg Financial Dictionary
Related: inverted market premium payback period . Bloomberg Financial Dictionary
Also called break-even time; the time it takes to recover the premium per share of a convertible security. Bloomberg Financial Dictionary
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1 —The price paid by the purchaser of an option to the grantor ( seller). 2 —The amount by which a cash commodity price trades over a futures price or another cash commodity price. Chicago Mercantile Exchange Glossary
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1. When a bond is redeemed at a premium to par (See also par value), this means that the redemption value exceeds the nominal value of the bond. Dresdner Kleinwort Wasserstein financial glossary
2. When a currency is trading at a premium in the foreign currency forward market, this indicates that it is strengthening in the forward market relative to the spot market. This means that a forward premium is deducted from the spot quote to give the forward quote. Dresdner Kleinwort Wasserstein financial glossary
3. The price paid to acquire an option. Dresdner Kleinwort Wasserstein financial glossary
4. The amount by which the futures price exceeds its fair value. Dresdner Kleinwort Wasserstein financial glossary
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Price expressed as the number of percentage points above par, e.g. a premium ( price) of 2.0% equals a price of 102 when par is 100. Euroclear Clearing and Settlement glossary
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( i) Options, the price a put or call buyer must pay to a put or call seller for an option contract.
(ii) The amount by which the market price of a bond exceeds its par value. Exchange Handbook Glossary
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A measure of how far the share price of an investment trust is above its net asset value, expressed as a percentage of the net asset value per share.
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The cost of an option contract. LIFFE
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A term used to describe the price paid for a covered warrant. London Stock Exchange Glossary
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The amount paid for the warrant. NYSE Euronext Glossary

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I. premium pre‧mi‧um 1 [ˈpriːmiəm] noun [countable]
1. INSURANCE a payment that you make for insurance:

• Some insurance companies offer small sum policies, with monthly or annual premiums.

single premium life insurance policies

• Car insurance premiums shot up by almost a quarter.

reˈnewal ˌpremium
INSURANCE a sum of money charged for making an insurance policy continue for a further period of time:

• Fill in the tear-off slip and send it with your renewal premium to the address below.

2. an additional amount of money, above a standard amount or rate:

• The company's earnings will grow by about 25% a year and investors will be willing to pay a premium (= pay more than usual ) for that growth.

• As long as there is a threat of war in the Middle Eastern oil fields, oil prices will command a premium (= buyers will have to pay more than usual ) .

ˈbond ˌpremium
FINANCE the amount by which the price paid for a bond is more than its actual value
conˈversion ˌpremium
FINANCE an increase in value to an investor when one form of investment in a company is exchanged for another:

• The debentures are convertible into common stock at $18.14 a share, representing an 18% conversion premium over yesterday's closing price.

moˈbility ˌpremium HUMAN RESOURCES
money paid to important international businessmen when they have to move from one country to another because of their jobs
ˈoption ˌpremium
FINANCE the price paid for an option (= the right to buy shares, bonds etc at a particular price in the future):

• Commissions on option trades run about 2% to 5% of the option premium.

3. at a premium if something is at a premium, there is little of it available or it is difficult to obtain:

• With parking space at a premium in Japanese cities, the microcar is a popular form of transport.

4. at a premium (to something) if one thing is sold at a premium to another, it costs more:

• Platinum usually trades at a premium to gold.

5. put/​place a premium on something if you put a premium on something, you consider it to be especially valuable:

• Employers today put a premium on reasoning skills and willingness to learn.

  [m0] II. premium premium 2 adjective [only before a noun] MARKETING
premium products, goods etc are of higher quality than usual:

Premium brands of beer will grow faster, in line with the trend toward people demanding better quality.

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   Premium is generally used to describe when something is trading above its normal price. An asset or fund is described as being at premium when its market price is above its face value. In the capital markets, it is the amount by which a bond sells above par. In foreign exchange terms, it is the margin by which the forward rate is higher than the spot. In commodity markets it is the additional price paid by a consumer when the delivered commodity is of better quality than that specified in the original contract. Premium is the opposite of discount.
   ► See also Discount, Par Value.

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Ⅰ.
premium UK US /ˈpriːmiəm/ noun [C]
an amount of money that is more than usual: »

We're willing to pay a premium for the best location.

attract/command a premium »

BMW, Mercedes, Volvo, and even Volkswagen have usually commanded a premium because they are seen as stylish.

HR, WORKPLACE PREMIUM PAY(Cf. ↑premium pay)
INSURANCE INSURANCE PREMIUM(Cf. ↑insurance premium)
See also SHARE PREMIUM(Cf. ↑share premium)
at a premium — Cf. at a premium
put a premium on sth — Cf. put a premium on sth
See also OPTION PREMIUM(Cf. ↑option premium)
Ⅱ.
premium UK US /ˈpriːmiəm/ adjective
of very high quality: »

The premium package also provides higher screen resolution.

»

All high street banks offer some sort of ""premium banking service"" to wealthier customers.

very high, or higher than usual: »

Experts advise businesses to switch to producing quality goods, which will be desirable to customers even at a premium price.


Financial and business terms. 2012.

Synonyms:

Look at other dictionaries:

  • premium — pre·mi·um / prē mē əm/ n 1: the difference between the face value or par value of a security and its market price when the latter is greater compare discount 2: the price paid for an insurance contract equal to the cost per unit times the number… …   Law dictionary

  • premium — [ premjɔm ] n. m. • XXe; mot lat. « butin » ♦ Fin. Prime versée pour une opération sur un marché à terme. ⇒ option. On écrirait mieux prémium. ● premium nom masculin (latin praemium, butin) Somme payée au vendeur d une option d achat (ou de… …   Encyclopédie Universelle

  • premium — premium, prize, award, reward, meed, guerdon, bounty, bonus are comparable when they mean something which is bestowed upon a person as a recompense for cooperation, greater effort, superior merit, or supremacy in competition. Premium is applied… …   New Dictionary of Synonyms

  • Premium — Pre mi*um, n.; pl. {Premiums}. [L. praemium, originally, what one has got before or better than others; prae before + emere to take, buy. See {Redeem}.] 1. A reward or recompense; a prize to be won by being before another, or others, in a… …   The Collaborative International Dictionary of English

  • premium — ► NOUN (pl. premiums) 1) an amount paid for a contract of insurance. 2) a sum added to an ordinary price or other payment. 3) (before another noun ) (of a commodity) superior and more expensive. ● at a premium Cf. ↑at a premium …   English terms dictionary

  • premium — [prē′mē əm] n. pl. premiums [L praemium, reward, recompense < prae , before + emere, to take: see PRE & REDEEM] 1. a reward or prize, esp. one offered free or at a special low price as an added inducement to buy or do something; bonus 2. an… …   English World dictionary

  • premium — [adj] excellent choice, exceptional, prime, select, selected, superior; concept 574 Ant. inferior, low, low class, poor premium [n] bonus, prize appreciation, boon, bounty, carrot*, dividend, extra, fee*, gravy*, guerdon, meed, percentage, perk* …   New thesaurus

  • Premĭum — (engl., abgekürzt pm.), Prämie, auf englischen Kurszetteln im Gegensatz zum damno oder discount (abgekürzt dis.) soviel wie Aufgeld, Überschuß über den Paribetrag …   Meyers Großes Konversations-Lexikon

  • premium — (n.) c.1600, reward given for a specific act, from L. praemium reward, profit derived from booty, from prae before (see PRE (Cf. pre )) + emere to buy, originally to take (see EXEMPT (Cf. exempt)). Insurance sense is 1660s, from It. premio.… …   Etymology dictionary

  • Premium — (1) Amount paid for a bond above the par value. (2) The price of an option contract; also, in futures trading, the amount the futures price exceeds the price of the spot commodity. Related: inverted market premium payback period. Also called… …   Financial and business terms

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