Chapter 02 · Section 2.1

"Long" and "Short" in the Context of Options

Note: A clear distinction between an options transaction and an options position is key to understanding options trading: the purchase of an option is not necessarily the same as a long option position, and "selling an option" does not mean exactly the same as "having a short option position"

That is why we clearly distinguish between the terms "Writer" and "Seller", and "Holder" and "Buyer".

The term "option writer" will be used to describe the result of selling an option as an initial transaction or it will be used to describe a short position in a particular option series. The term "option seller will only be used when referring to the action of selling, not the result. The same sort of distinction is made between "buyer" and "holder".