« Back to Glossary Index

The volume premium method in finance is a way of figuring out the price of something special, but instead of just looking at the regular price, you also pay attention to how many of those special things are being traded. Think of it this way: Imagine you’re at a farmer’s market and there’s a vendor selling delicious, rare apples. How do you find the price of these apples? The volume premium method would consider not only the taste of the apples but also how many people want them. If a lot of people are excited about the apples and there aren’t many available, the price might go up. In simple terms, the method calculates how excitement and demand for something special can affect its price. It is a way to determine the value of an intangible asset based on the volume or quantity of its usage or sales.