What is GTU's "premium"?
When GTU is compared to GLD as a gold investment, the primary critique is that it has a high "premium". What is meant by this? What is GTU's "premium", how is it determined and where can we look to see what it is at any given time?
Answers
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alanj answered 4 months ago …
GLD is an ETF and I will assume that GTU is also.
The term premium is used in connect with options. The premium is the price of the option. The high premium means it cost more. It also usually means it has a high volatility. To find the option premium go to a financial web site like Yahoo or Marketwatch or your brokerage web site and pull up the stock you are interested in on the Quote or Chart page. Here you will see a link that will say Options or Chains.After clicking the link the new page will show a Bid and an Ask price for the option strike prices. If you want an immediate purchase use the Ask price. If you own the stock and want an immediate sell use the Bid price. You can also place your own Bid or Ask price by using a Limit Order. Place the Limit price somewhere between the Bid and Ask price. Do not use the Last price which many sites will display, as some options that are lightly traded the last price could be days or even weeks old.
