Option Premium

This problem practices a basic options concept that comes up often in capital markets and sales and trading interviews. Candidates need to understand the roles of the buyer and seller in an options contract, how the premium fits into the trade, and why the cash flow goes to one side of the transaction rather than the other. Interviewers ask this because it tests whether you can explain derivatives clearly and accurately, which is important for discussing pricing, risk, and trade mechanics in a market-facing role.