a contract by which one party, the giver or holder, gives a small sum of money, the premium or option money, to the other party, the taker, for the right to buy from him a certain quantity of a stated security during an agreed period at an agreed price, the striking price.
[...] The generation of additional capital or income may arise out of taking advantage of price imperfections or from the receipt of a premium for writing of call or put options (even if the benefit is obtained at the expense of the chance of yet greater benefit) or pursuant to stocklending as permitted by the FSA Regulations. [...]