What is a call option and what is a put option?
A call option gives the buyer the right to purchase the underlying security at a set price (the “strike price”) on or before the expiration date. If you are short a call option and it is exercised by the buyer, then you have an obligation to sell the underlying security at the strike price. A put option gives the buyer the right to sell the underlying security at the strike price on or before the expiration date. If you are short a put option and it is exercised by the buyer, then you have an obligation to purchase the underlying security at the strike price.
