In exchange for an option, the holder pays the writer a premium, which is the cost of buying an option. The value of the premium depends on several factors but generally reflects the value of the underlying asset, the time left until the option expires, and how close the stock is to the strike price. Basically, the more unlikely the contract is to execute, the higher the value. Additionally, both the writer and the holder pay fees as they would for any market transaction. These vary depending on which brokerage the trader uses.