Premium is the difference between the selling price and the fact value of a bond/stock, when the bond/stock is sold for more than its face value.
Definition 2.
Premium as related forward rates, represents the percentage amount by which the forward rate exceeds the spot rate. As related to currency options, represents the price of a currency option
.
Premium is the amount paid for an option contract.
Premium means something of value given free or at a nominal charge as an incentive to buy a product. Also, the amount by; which a bond’s market price exceeds its par value. Also, a fee paid on an insurance policy.
In insurance, a fee paid to the insurance company for protection against loss; in consumer sales promotion, a gift given to a customer for buying a certain product.