Options represent the right (but not the obligation) to take some sort of action by a predetermined date. That right is the buying or selling of shares of the underlying stock.
A call is the option to buy the underlying stock at a predetermined price (the strike price) by a predetermined date (the expiry).
A put is the option to sell the underlying stock at a predetermined strike price until a fixed expiry date.
Relatively few options actually expire and see shares change hands. Options are, after all, tradable securities. As circumstances change, investors can lock in their profits (or losses) by buying (or selling) an opposite option contract to their original action.
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