Premium
The total amount paid for an options trade. It equals the option price times the contract multiplier times the number of contracts.
In options flow, premium is the dollar size of a trade. It is calculated by multiplying the quoted option price by the contract multiplier, which is 100 for a standard U.S. equity option, and then by the number of contracts traded.
Premium is the figure scanners use to rank and filter prints, because it reflects how much capital changed hands. The word also refers to the option’s quoted price itself, as in a call trading at a premium of $1.50.
Illustrative example (hypothetical numbers, not a real trade): a trade of 40 contracts at $2.50 carries premium of 40 × $2.50 × 100 = $10,000. The same $10,000 could also come from 400 contracts at $0.25, which is why premium and contract count are read together.