Investment dictionary

BACK FEE

Back Fee: translation

A payment made to the writer of a compound option in the case that the call option is exercised in order to obtain a put option. Back fee is a premium charged at the second portion of the option, since a compound option is an option to purchase an option.

Compound options are most commonly used by mortgage originators as a way to mitigate risk. The back fee is offered at a premium, because it provides an investor with the ability to wait before executing an option.


  1. back fee—back fee translation The fee paid on the extension date if the buyer wishes to continue the option. Bloomberg Financial Dictionaryu...Financial and business terms
  2. back fee—Back fee translation The fee paid on the extension date if the buyer wishes to continue the option. The New York Times Financial Glossaryu...Financial and business terms
  3. back fee—фин. возвратное вознаграждениеu сумма выплачиваемая покупателем опциона для продления срока его действия если такая возможность предусмотренаem option . Возвратное возн...Англо-русский экономический словарь