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   Step Premium Option
   















 

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Step Premium Option

A variant on the Contingent Premium Option which shares the feature that the buyer pays no up front premium. However, at designated price levels, as the option moves toward and through the strike, more premium is paid. The premium will be greater than the premium on a standard option if the option is in-the-money at expiration, but the total premium will be less than the premium on a contingent premium option.

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