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Definition of premium income - 1 dictionary result
Financial Dictionary

premium income

Fees in the form of premiums received by an investor who sells short a call option or put option. For example, an investor holding shares of BP can earn premium income by writing covered call options that give the buyer of the calls the right to purchase the option writer's BP shares at a fixed price until a stated date.

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