The percentage or price of a security in excess of its par or face value. Taking the face value as $100, a share of stock selling at 105 would be selling at 5%, or $5 per share, premium. The par values of various securities differ, however (see "Par"), therefore it does not argue that if a share of stock is quoted at 150 it is selling at a premium, for if, by chance, the face value of that share happens to be $500, it would really be selling, not at a premium at all, but at a material discount. There are exceptions to this, for which see reference to the stock exchange rules under "Par."
Premium has other meanings, for which see "Agio" and "Bonus," by the use of either of which a premium may be understood. Gold is at a premium when in order to obtain a dollar in gold it is necessary to give more than a dollar in some other money; at least, gold would be selling at a premium in relation to that particular money. During 1893 there was a "premium on currency;" currency was so scarce that in order to obtain enough for most pressing needs, certified checks were given at the rate of $104 for $100 in currency. Currency was at 4% " premium."
The yearly payments upon life insurance policies are known as " premiums."
The price paid for an "option" (see "Options") is called "premium."