What is a premium?

The premium is the sum of money what an investor pays extra to obtain certain perks, usually these perks are the option which are associated with the stocks. Also the premium is the difference between the fixed income security’s face value and the higher price what the investor is paying. For example when an investor pays a for a premium and obtains an option he will would get certain privileges like selling a fixed amount of shares on stock price, note this options usually have en expiration date. Another example if a bond’s face value is $100 and on the market is sold for $105 then the premium is $5. How the premium is calculated concerning a warrant, the actual price of the warrant subtracting the difference between the exercised price and the price of the underlying asset.