Financial encyclopediaReviewed 2026-10-23

Premium

A bond that sells at a price higher than its principal (par) amount is considered to be selling at a premium.

PROFILE / FACT FILE

Concept at a glance

Term: Premium [1]
Subject area: Investor.gov glossary [1]
Jurisdiction / scope: US regulatory and investor-education context [1]
Primary reference: SEC · Investor.gov [1]

Definition and explanation

A bond that sells at a price higher than its principal (par) amount is considered to be selling at a premium. [1]

Exchange-traded funds (ETFs) and other publicly traded funds trade at a premium when the market price of a fund share is higher than the fund’s NAV per share. [1]

Source-supported connections

Premium → Mentioned in the official explanation → Exchange-traded funds [1]

Premium → Mentioned in the official explanation → Principal [1]

Frequently asked questions

What does Premium mean in the cited reference?

A bond that sells at a price higher than its principal (par) amount is considered to be selling at a premium. [1]

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Sources and review dates

US SEC · Investor.gov — Premium ↗

Reviewed 23 October 2026. Historical dates and award-time affiliations retain their original context. A review date is not an event date. Background sources are identified separately from official records.

Content preparation: source-based compilation with AI assistance. See methods and attribution. Named sources identify the underlying records; no individual expert review is claimed.