Option An option is a contract between a buyer and seller that gives the buyer the right, but not the obligation, to buy or sell a particular asset at an agreed price (called the "strike price") at a later date. In return for providing the right, the seller of the option collects a premium from the buyer of the option. A call option gives the buyer of the option the right to buy the underlying asset. A put option gives the buyer of the option the right to sell the underlying asset. The holder of the option can then choose to buy or sell the underlying security at the strike price during this time period. However, the holder is under no obligation to buy the asset and may choose to let the option expire.