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front fee

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Online Options Trading
Get Leading Tools For the Job! For The Smarter Trader - OptionsXpress.
www.optionsXpress.com
Financial Dictionary

Front Fee

The premium charged upon the initial purchase of a compound option.

Investopedia Commentary

In other words, the front fee is what it costs to acquire a compound option. If the compound option is exercised, a second payment (the back fee) must be made.

Related Links

Options Basics Tutorial

See also: Back Fee, Compound Option, Exercise, Premium

Investopedia.com. Copyright © 1999-2005 - All rights reserved. Owned and Operated by Investopedia Inc.
Cite This Source
Online Options Trading
Get Leading Tools For the Job! For The Smarter Trader - OptionsXpress.
www.optionsXpress.com
Financial Dictionary

front fee

The payment made to acquire a compound option. A second payment must be made in the event the compound option is exercised. Compare back fee.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
Cite This Source
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