option premiums

Discussion in 'Trading' started by wendy37, Jan 27, 2007.

  1. wendy37

    wendy37 Guest

    Can any one help? I am a new trader and I pretty much get everything I've learned so far regarding stock options. I just can not understand how you come up with the premiums on options. can someone explain it to me in the simpliest terms? what two numbers do I have to add or multiply to come up with a stock options premium? for example if a june contract is currently trading at $45.43 and a june call option strike price is $46.00 would the premium for that contract be $570?

    Please send a response