call premium investment & finance definition
A premium that bond issuers must pay to purchasers of their callable bonds to compensate them for the fact that the bonds may be called before maturity and the bondholders may not receive as much ...
Call Premium
Investment Dictionary:
Call Premium
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Call premium
Definition:
Premium in price above the Par value of a Bond or share of Preferred stock that must be paid to holders to redeem the bond or share of preferred stock before its scheduled maturity date. ...
CALL PREMIUM - See: REDEMPTION PREMIUM.
CALL PRICE - The price, as established in the bond contract, at which securities will be redeemed, if called.
Call Premium The difference between then call price and the security's value.
Call Provision A provision that entitles the corporation to repurchase its bonds or preferred stock from their holders at stated prices over specified periods.
Call Premium
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.
Call premium.
The dollar amount over par that an issuer pays to an investor when a bond is called for redemption prior to maturity. Usually stated as a percentage of the principal amount called.
Coupon.
Call Premium
The amount a call option costs.
Capital
The amount of money an individual or business has available.
Call Premium: The amount to be paid over and above the face value if the issuing corporation calls a security for redemption before maturity.
Cancel or Change Former Order (CFO): An order that cancels or changes a customer's current order.
(B) A registered mutual fund that invests in tax-exempt obligations, or an account held by the trustee of an issue used to pay debt service and call premiums (if any) on an issue.
To protect investors, callable bonds often require the issuer to pay a call premium to the bondholder.
Optionality - a bond issuer may embed certain options within the bond.
You are likely to see that put premiums are lower than call premiums. Are puts cheaper than calls?
So you would have made around $5.40 on call premiums. That's a 24% return in addition to the 10% you made on the stock. Wouldn't you rather have 34% than just 10%?
Downside Protection: A put generally used in connection with covered call writing. It is used while long stock to prevent disaster. When used to buy-write, it is the call premium that gives you a limited cushion on the downside.
You also earn the written call premium in full.
So:
Value realized if you then chose to sell the Jan-2013 call = $21.10 ...
When i will short put then i have to give margin to the broker and in downside i will lost my call premium as well as the amount of put (which can be unlimited) This strategy does not give any downside protection.
Peter ...
As it assumes that early exercise will occur only if the advantage of holding the currency exceeds the time value of the option, their binomial method evaluated the call premium by estimating the probability of early exercise for each successive day.
The date on which a bond may be redeemed by the issuer before maturity which may be at par or at a higher value. The difference is known as the call premium.
Call for Delivery ...
The call price generally includes a call premium that is greater than the bond's face value. Conservative investors calculate both a bond's yield to call and yield to maturity, selecting the lower of the two as a measure of potential return.
You can buy great dividend stocks at reasonable prices with the chance to sell call options at inflated prices. If the stocks do nothing, you can still get almost 10% per year from dividends and call premiums.
 See also: Premium, Call, Market, Investment, Option
  
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