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. Investopedia Says:
1. The call premium is somewhat of a penalty paid by the issuer to the bondholders for the early redemption.
2. In order to receive the rights associated with a call option, the premium must be paid to the seller. Related Terms:
Call Provision
Callable Bond
Conversion
Extraordinary Redemption
Forced Conversion
Indenture
Make Whole Call
Refinance
Yield to Call |