Premium

The amount paid in exce of the par (face) value.. When a stock, for instance, is selling at a premium the premium is the amount it brings beyond its par or face value. When a stock is lending at a premium (see Borrowing and lending stocks) the premium is the amount paid by the borrower of the stock to the lender of it for the use of it. The purpose, usually, for which a stock is borrowed is to enable the borrower, who has sold it short (sold stock he did not po e ), to make delivery to the purchaser. In Great Britain when a stock or other security is at a premium the premium is reckoned at so much in the pound on shares and at a percentage on stock or bonds. See Percentage. In insurance in Great Britain the premium is the consideration paid by the policy holder for insurance. Thus, a premium of 20 shillings per cent means that 20 shillings is the premium on each £100 insured. For information as to premium on gold see Gold premium.