Options

The call buyer has the right, but not the obligation, to buy 100 shares of the underlying stock at the strike price until expiration. The buyer is bullish and pays a premium for this right.

The call writer has the obligation to deliver (sell) 100 shares at the strike price if assigned. The writer receives the premium and is bearish to neutral on the underlying.

The put buyer has the right, but not the obligation, to sell 100 shares of the underlying at the strike price until expiration. The put buyer is bearish and profits when the stock falls.

The put writer has the obligation to buy (take delivery of) 100 shares at the strike price if assigned. The writer receives the premium and is bullish to neutral on the underlying.

One standard listed equity option contract covers 100 shares of the underlying stock. Premiums quoted per share are multiplied by 100 to get the contract's total dollar cost.

Premium = intrinsic value + time value. Intrinsic value is the in-the-money amount; time value is the remaining premium reflecting time to expiration and volatility.