HOW TO CALCUTE OPTION PREMIUM.
WHEN WE SPREAD PREMIUM ON MONTHS
AND WHEN WE DIVIDE PREMIUM BY 100
SHARE
CURRENCY
INTEREST
WHEN WE SPREAD PREMIUM ON MONTHS
AND WHEN WE DIVIDE PREMIUM BY 100
SHARE
CURRENCY
INTEREST
Ask the Tutor ACCA AFM
PREMIUM ON OPTION
14y ago#1I am not sure what you are asking. Please be a bit more specific.
If you are talking about interest rate options then you always divide the premium in the table by 400. 100 because they are given in percentages, and 4 because they are always three month futures (so 4 lots of three months in a year)
If you are talking about interest rate options then you always divide the premium in the table by 400. 100 because they are given in percentages, and 4 because they are always three month futures (so 4 lots of three months in a year)
Sign into reply to this topic.