Call Option: A contract that gives the buyer the right, but not the obligation, to buy 100 shares of a security at a set price known as the Strike Price. The seller of a call option has the obligation, but not the right, to sell 100 shares of a security at the Strike Price.
Put Option: A contract that gives the buyer the right, but not the obligation, to sell 100 shares of a security at a set price known as the Strike Price. The seller of a put option has the obligation, but not the right, to buy 100 shares of a security at the strike price.
Strike Price: The price at which the option can be exercised.
Option Chain: A list that shows all the option prices for the given security.
Option Spread: An option position established by simultaneously buying and selling options.
Debit Spread: Two options with different market prices that an investor trades on the same underlying security. The higher priced option is purchased and the lower premium option is sold - both at the same time. The higher the debit spread, the greater the initial cash outflow the investor will incur on the transaction.
Credit Spread: An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security.
Vertical Spread: An options strategy with which a trader makes a simultaneous purchase and sale of two options of the same type that have the same expiration dates but different strike prices. It can be opened as a debit spread or a credit spread.
Calendar Spread: An options spread established by simultaneously entering a long and short position on the same underlying asset but with different months.
Additional information can be found at:
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