(1) The price of an option—the sum of money that the buyer of an option pays when an option is purchased and that the writer of an option receives when an option is written. The sum of the intrinsic and the time value is the premium.
(2) In Foreign Exchange, the adjustment of a spot price that is made in arriving at a quote for future delivery. The premium usually represents differences in interest rates for comparable instruments in two countries.
Premium 
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