The Law Dictionary

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CONTINGENT PREMIUM OPTION Definition & Legal Meaning

Definition & Citations:

An OVERTHECOUNTER COMPLEX OPTION where the buyer is only obliged to pay the seller PREMIUM if the contract ends INTHEMONEY. If the option ends inthemoney but the INTRINSIC VALUE is less than the premium due to the seller, the purchaser is still obligated to exercise the option and pay the premium. Also known as PAY LATER OPTION, WHENINTHEMONEY OPTION.


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