Options are broadly classified into ‘Call’ and ‘Put’
Call: Is a contract that allows the option buyer (after paying an option premium) to have the right but not the obligation to buy the underlying asset (typically 100 shares) at the strike price within a specified time. The seller of the option (after receiving an option premium) is obligated to sell the underlying asset to the buyer at the exercise price if the buyer exercises his right.
Put: Is a contract that allows the option buyer (after paying an option premium) to have the right but not the obligation to sell the underlying asset (typically 100 shares) at the strike price within a specified time. The seller of the option (after receiving an option premium) is obligated to buy the underlying asset from the buyer at the exercise price if the buyer exercises his right.