Template:M summ EUA Annex Premium

A workaday definition that captures the option premium you pay to buy an option. Once paid, you have no further obligations under the Transaction, just the right — confitional on the option being in the money — to be paid on exercise. This can make matters interesting should your swap dealer decide to play Dumme Wichser with the flawed asset provision in your ISDA — newsflash: it won’t, as long as its risk team retains possession of their deliberative faculties, but that won’t stop the negotiation community obsessing about how to cater for the contingency that they do not. There is a lengthy disquisition about it in the “details” section of our article on Section 2(a)(iii).