An option is a contract written by the option seller and held by the option buyer. The option seller, in exchange for the contract, receives a premium from the buyer. The option buyer receives the option (the right but not obligation) to either sell to the seller or buy from the seller shares of the underlying stock at some (strike) price by the expiration date.
| PUT | CALL | |
|---|---|---|
| Buy | buy PUT | buy CALL |
| Sell | sell PUT | sell CALL (danger if short!) |