Back Fee

A compound option. You want to purchase a call to buy 500 shares of Nanny's Notorious Ninjas by July 10, 2019. You pay $20 to buy the right to buy 500 shares. Maybe you'll exercise this option, maybe you won't. When you actually buy the shares, you pay a back fee. But you only pay it if you exercise the option. It's a fee on the second part of your contract, because you essentially put these shares on hold. Financial layaway.