Call Premium

What Does Call Premium Mean?
1. The dollar amount over the par value of a callable fixed-income debt security that is given to holders when the security is called by the issuer.

2. The amount the purchaser of a call option must pay to the writer.

Investopedia explains Call Premium
1. The call premium is somewhat of a penalty paid by the issuer to the bondholders for the early redemption.

2. In order to receive the rights associated with a call option, the premium must be paid to the seller.

Related Terms

Call Provision
Callable Bond
Conversion
Extraordinary Redemption
Forced Conversion
Indenture
Make Whole Call
Refinance
Yield to Call
More Related Terms

Related Links

Options Basics Tutorial - An introduction to the world of options, covering everything from primary concepts to how options work and why you might use them.
Call Features: Don't Get Caught Off Guard - Learn why early redemption occurs and how to avoid potential losses.
Advanced Bond Concepts - Learn the complex concepts and calculations for trading bonds including bond pricing, yield, term structure of interest rates and duration.
FREE Options Trading Manual - Get a free 21-page Book on learning to trade options from the Chicago Board of Trade. If you are new to the option market, this booklet is designed for you!
Is there a method to your trading, or just madness? - Many professional traders say developing a solid approach, and sticking to it, is key to trading longevity. Lind-Waldock offers some timeless trading wisdom in this free downloadable guide.
Trade with optionsXpress! - optionsXpress. Options, stocks and futures. One online account.
Resolve to Diversify. Choose Commodities. - Don't repeat trading mistakes of 2008. Consider your investment alternatives. Trade 700+ global futures markets with Lind-Waldock.
FxPro.com - Trade Forex Like a Pro

Get a new investing term in your inbox each day!

- join our Term of the Day!