calls and puts. premiumin the money option in the money call option means the option's strike price is below its current market pricein the money put option means the option's strike price is above its current market pricesell to close refers to the action of selling the contract and closing the positionThe purchase of a call option provides the buyer with the right, but not the obligation, to purchase the underlying item at a specified price, called the stricke price at any time up to and including the expiration date.
Therefore, a seller of a call option contract, i.e. a “naked” or short call, always has the obligation to sell the appropriate amount of the underlying security if the short call option is in-the-money
The actual profit/loss at expiration of buying a call, assuming it expired at or higher than the strike price
[Asset price] - [Strike Price] - [Price Paid for the Call]
The formula for the /loss at expiration of buying a call, assuming it expired at or lower than the strike price
loss of [The call premium]
The purchase of a put option provides the buyer with the right, but not the obligation, to sell the underlying asset at a specified price, called the stricke price at any time up to the expiration date.
The maximum loss of a put would be the price of the premium that was paid for the put, if the market price is higher than the strike price at expiration
The profit at expiration of buying a put, assuming the asset price is lower than the strike price
[Strike Price] - [Asset Price] - [Price paid for the put]
The profit/loss at expiration of buying a put, assuming the asset price is the same or higher than the strike price
loss of [The put premium]
Means you received money to open a position, like selling an option
Means you spend money to open up a trade