Who sets the premium price for options?
The amount of the premium is determined by several factors - the underlying stock price in relation to the strike price (intrinsic value), the length of time until the option expires (time value) and how much the price fluctuates (volatility value).
Who determines the price of an option?
Basics of Option Pricing\n\n Options traders must deal with three shifting parameters that affect the price: the price of the underlying security, time, and volatility. Changes in any or all of these variables affect the option's value.
What is call option and put option who decide the premium?
A call option is a right to buy an underlying asset or contract at a fixed price at a future date but at a price that is decided today. On the other hand, the put option is the right to sell an underlying asset or contract at a fixed price at a future date but at a price that is decided today.
Who gets the option premium?
The premium of an option is paid by the buyer to the seller upon the sale of the contract—not at the contract's expiration. Option premiums are not refundable.