The price paid for an option is known as the

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Multiple Choice

The price paid for an option is known as the

Explanation:
The price you pay to obtain an option contract is called the premium. An option gives you the right, but not the obligation, to buy or sell an underlying asset at a fixed price by a certain date. The fixed price at which you could exercise the option is the strike price (also called the exercise price). The intrinsic value is what the option is worth if you exercised it right now (for a call, stock price minus strike price; for a put, strike price minus stock price). The premium includes intrinsic value and time value, reflecting how much time remains and how volatile the underlying could be. So the moment you buy the option, you pay the premium.

The price you pay to obtain an option contract is called the premium. An option gives you the right, but not the obligation, to buy or sell an underlying asset at a fixed price by a certain date. The fixed price at which you could exercise the option is the strike price (also called the exercise price). The intrinsic value is what the option is worth if you exercised it right now (for a call, stock price minus strike price; for a put, strike price minus stock price). The premium includes intrinsic value and time value, reflecting how much time remains and how volatile the underlying could be. So the moment you buy the option, you pay the premium.

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