An option is an agreement between a buyer (taker) of the option and the seller (writer) of the option. The buyer purchases the “right” to buy or sell something at an agreed price on or before an agreed date. The seller receives payment (the premium) and now has the “obligation” to deliver something if called upon by the option buyer.
Options in some form have existed for thousands of years. The earliest record of an options contract is from the famous Greek philosopher Aristotle. He wrote of an even earlier philosopher known as Thales of Miletus.