What is Option Premium?

The price of an option contract

💵

₹200

is a typical NIFTY ATM premium

Premium = Intrinsic Value + Time Value. For ATM options, it's mostly time value. This time value decays every day.

Two Parts of Premium

INTRINSIC

Real value right now

Only ITM options have it

Doesn't decay

Strike vs Spot difference

TIME VALUE

Hope value

All options have it

Decays daily (theta)

Sellers earn this

📉

₹0

is where most premiums end

80%+ of options expire worthless. All that time value → gone. Sellers collected it. Buyers lost it.

Premium Factors:

⏳Time to expiry — more time = more premium

📊Volatility — higher VIX = fatter premiums

🎯Strike distance — ATM = highest premium

📅Day of week — Monday premium > Thursday

Profit from Premium Decay

Our system sells premium systematically.

Learn the Strategy →

Past performance is not indicative of future results.

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Option Premium: What You're Really Paying For
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