An option is a contract that gives one party the option to enter into a transaction either at a specific time in the future or within a specific future period at a price that is agreed when the contract is issued.

A call option gives the holder that right but not obligation to buy a share at a fixed price on a future time.

A put option gives the holder the ight but not obligation to sell a share at a fixed price at a fixed future date.

Premium is the price paid by the option buyer to the seller, or writer, or dealer, for the right to buy or sell the underlying shares.

When the investor buys option the investor has a long position.

A long position is one held if you believer the value of the underlaying asset will rise. For instancem if you own shares in a company you have a long position as you presumable believer the shares will rise in value in the future.

When the insestor sells option the investor has a short position.

A short position is one held if you believe the value of hte underlying asset will fall. FOr instancem if you buy options to sell a company's shares, you have a short position as you would gain if the value of the shares fell.

Exercise price is the price at which the future transaction will take palce.

Intrinsic value of share option is the difference between the share price and exercise price on the expiry date.

A european option can only be exercised at expiration 

An America option can be exercised any time prior to expiration.

A bermudan option is an option where early exercise is restricted to certain dates during the life of the option.