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Premium and discount is the concept of pricing within a range of price (between two swing points or overall leg of price). It’s a
principle based on economics and in many cases logic/common sense.
▫When determining where premium and discount pricing is within a leg of price, we typically measure the leg, where premium
pricing is the top 50% of the leg, discount pricing is the bottom 50% of the leg, and equilibrium is at the mid-point (50%) of the
leg.
Premium
The premium portion of the range is where prices are the highest and therefore at a premium - when price is within the top portion
of the range you ideally want to be a seller.
Discount
The discount portion of the range is where prices are the lowest and therefore at a discount - when price is within the bottom
portion of the range you ideally want to be a buyer.
Equilibrium
The equilibrium point is the halfway point of the range or a place of fair value. This is an equal opportunity price point within an
range (leg) of price where both sell and buy opportunities are technically valid.
SOURCES
https://discord.com/channels/728715235531161611/728715235531161615/818317732713988147