Terms Relating to Premium - Equity Derivatives Provision

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2002 ISDA Equity Derivatives Definitions
A Jolly Contrarian owner’s manual

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Resources About the Equity Derivatives Definitions | (full wikitext) | (nutshell wikitext)
Hot topics Synthetic Prime Brokerage Anatomy | The Triple Cocktail | Cancellation and Payment | Calculation Agent
TOC | 1 General Definitions | 2 Option Transactions | 3 Exercise of Options | 4 Forward Transactions | 5 Equity Swap Transactions | 6 Valuation | 7 Settlement | 8 Cash Settlement | 9 Physical Settlement | 10 Dividends | 11 Adjustments and Modifications | 12 Extraordinary Events · 12.8 Cancellation Amount · 12.9 Additional Disruption Events · 12.9 List of ADEs · 12.9(b) Consequences of ADEs | 13 Miscellaneous

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Section 2.4 in a Nutshell
Use at your own risk, campers!

2.4. Terms Relating to Premium.

2.4(a) Payment of Premium: Buyer must pay Seller the Option Transaction Premium on the Premium Payment Date.
2.4(b)Premium” for an Option Transaction will be specified in the Confirmation. Where the Confirmation specifies a Premium per Option, the Premium will be the product of the per-Option Premium and the Number of Options.
2.4(c)Premium Payment Date” will be the date specified as such in the Option Transaction Confirmation or, if it is not a Currency Business Day for the currency of the Premium, the next following Currency Business Day. If it is not specified, the Premium Payment Date will fall one Settlement Cycle following the Trade Date, or if that is not a Currency Business Day, the next following Currency Business Day.

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Full text of Section 2.4

Section 2.4. Terms Relating to Premium.

2.4(a) Payment of Premium. In respect of an Option Transaction, Buyer shall pay Seller the Premium on the Premium Payment Date.
2.4(b) Premium. “Premium” means, in respect of an Option Transaction, the amount specified or otherwise determined as provided in the related Confirmation. If a Premium per Option is specified in the related Confirmation, the Premium shall be the product of the Premium per Option and the Number of Options.
2.4(c) Premium Payment Date. “Premium Payment Date” means, in respect of an Option Transaction, the date specified or otherwise determined as provided in the related Confirmation or, if such date is not a Currency Business Day for the currency in which the Premium is payable, the next following Currency Business Day. If the Premium Payment Date is not specified in the related Confirmation, the Premium Payment Date will fall on the date that is one Settlement Cycle following the Trade Date, or if such date is not a Currency Business Day, the next following Currency Business Day.

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Summary

You will forgive us for not getting too excited about the Premium terms of Section 2.4, functional and unadorned as they are.
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See also

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References