The put option premium that is paid by a put buyer. It represents the compensation a put buyer pays to a put seller against possessing the right to exercise on some underlying asset or variable. In other words, it refers to the put premium from the put buyer’s perspective. For example, the right to exercise on some put option may cost $5. The buyer will pay this amount as a long put premium to the seller (who receives it as a short put premium).
April 27, 2023
