An option Premium is the price of the option.
It is the price you pay to purchase the option. For example, an XYZ June 25 Call (it is mean, an option to buy Company XYZ stock) may have an option premium of $ 0.5. This means that this price of option XYZ for June is $ 50 . Why? Because listed of options must be in 100 shares of stock (market lot), and all equity option prices are quoted on a per share basis, so they need to be multiplied times 100 (market lot).
More in-depth pricing concepts will be covered in detail in other section.
Strike Price
The Strike (or Exercise) Price is the price at which the underlying security (in this case, XYZ) can be bought or sold as specified in the option contract.
For example, with the XYZ June 25 Call, the strike price of 30 means the stock can be bought for $ 30 per share. Were this the XYZ June 30 Put, it would allow the holder the right to sell the stock at $.30 per share.
The strike price also helps to identify whether an option is in-the-money, at-the-money, or out-of-the-money when compared to the price of the underlying security. You will learn about these terms later.
Expiration Date
The Expiration Date is the day on which the option is no longer valid and ceases to exist. The expiration date for all listed stock options in the U.S. is the third Friday of the month (except when it falls on a holiday, in which case it is on Thursday).
For example, the XYZ June 30 Call option will expire on the Fourth Thursday of June.
