1. A futures call option conveys to the call buyer the right to buy the underlying futures contract at a set price (the strike price) until the option expires.
   
2. A futures call option conveys to the call seller the obligation to sell the underlying futures contract at a set price (the strike price) until the option expire.
   
3. A futures put option conveys to the put buyer the right to sell (take a short position in) the underlying futures contract until the option expires.
   
4. A futures put option conveys to the put seller the obligation to buy the underlying futures contract until the option expires and if the put owner exercises his right.
   

Options Language

Before trading options, it is important to understand certain terminosogy relating to options:

   - Call -The buyer has the right to buy a futures contract at a specified price for a limited time (until the contract expires):

   - Call buyer -Pays a premium (money) for the right to buy until expiration the underlying futures contract at the specified (strike/exercise) price.

   - Call writer -Receives a premium and takes on, until expiration, the obligation to sell the underlying futures contract at the specified price if the
     call buyer exercises the option Covered –Position of an option writer (seller ) who owns the underlying asset and can guarantee delivery if the
     option contract is exercised.

   - Expiration date -The specified date on which the option either is exercised or becomes worthless and the buyer no longer has rights under the
     contract.

   - Naked (or uncovered) -Position of an options investor who writes call or a put on a futures contract and does not own the underlying asset.

   - Option -A contract giving the buyer the right to buy or sell a futures contract and requiring the writes to sell or buy the underlying futures
     contract if the option buyer exercises the right granted under the contract.

   - Put -The buyer has the right to sell a futures contract at a specified price until expiration.

   - Put buyer -Pays a premium (money) for the right to sell the underlying futures contract at the specified price until expiration.

   - Put writer --Receives a premium and takes on, for a specified time, the obligation to buy the underlying futures contract at the specified price
     if the put buyer exercises the option.

   - Strike price -(Or exercise price) the price at which the underlying futures contract will be transferred if the option buyer exercises the contract
     regardless of the current market price.

   - Premium -Money the option buyer pays (for acquiring a right) to the option writer (for accepting an obligation). The amount of the premium is
     not standardized in the contract .Rather, it is determined by the market –an amount buyer will pay and sellers will accept.

   - Underlying futures contract -Futures contract bought or sold when an option is exercised or on which an options is based.