Option premium
Option premium is the price of an option contract. It is quoted per share, so a premium of 2.50 costs 250 dollars for one contract covering 100 shares.
In depth
Premium splits into two parts. Intrinsic value is what the option would be worth if you exercised it right now. A 100 strike call with the stock at 103 holds 3 dollars of intrinsic value. Anything above that is time value, the price of the chance that the stock keeps moving before expiry.
So a 100 strike call trading at 4.20 with the stock at 103 is 3 of intrinsic value and 1.20 of time value. That 1.20 drains away as expiry gets closer, faster in the final days. An out of the money option has no intrinsic value at all, so the whole premium is time value.
Why it matters
Traders see a 40 dollar contract and call it cheap. Cheap usually means the entire price is time value, so the stock has to move just for you to break even. Knowing the split tells you how much of your money is riding on speed rather than on direction.
TraderLog imports your options trades from Schwab or IBKR, so what you paid and what you got back land on the calendar. Automatic tags flag the ones that expired worthless, and the stats page shows results by how long you held.
Frequently asked questions
One standard equity option covers 100 shares, so a quote of 2.50 means 250 dollars for the contract.
Time left until expiry, how far the strike sits from the price, and how big a move the market expects.
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