An option is a right, not an obligation

Most people who come from corporate finance assume options are exotic, mathematical, hedge-fund stuff. They're not. An option is the simplest financial contract you can write down.

Here's the entire thing in one sentence:

An option gives the buyer the right — not the obligation — to buy (call) or sell (put) an asset, at a fixed price, on or before a fixed date.

The seller has the obligation. The buyer has the choice. In exchange for that asymmetry, the buyer pays a premium upfront.

Why this asymmetry matters: your loss is capped at the premium, but your potential gain depends on how far the underlying moves in your favor. Stocks bought outright don't do this — if a stock crashes, you lose proportionally to your position. With a call option, you can be wrong, lose the premium, and that's it.

This is the entire reason options exist. Every other concept — Greeks, volatility, structured products — is just figuring out how much the premium should be for a given right, and how it changes as time passes and markets move.

Why does someone sell an option then?

Because someone is willing to pay them upfront for taking on the obligation. The seller pockets the premium today and accepts the risk that, at maturity, they may be forced to deliver the asset (call) or buy it (put) at a price that's worse than the market.

In a sense, the seller is an insurance company: they collect a small premium from many buyers, hoping that not all of them "claim" (= exercise profitably) at the same time. The buyer is the insured: they pay a small certain cost to hedge against an uncertain larger one.