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Long Option Position:

The position of an option buyer (owner) that represents the right to either buy stock (in the case of a Call) or to sell stock (in the case of a Put) at a specified price (the strike price) at or before some date in the future (the expiration date). It results from an opening purchase transaction e.g., long Call or long put.

The term long option position means that an option is owned and the owner has some kind of right.

For example, the owner of a call is described as having a long call position. If you have “5 long calls,” then you have the right to buy 500 shares of some underlying stock at the strike price until the expiration date.

A put owner is described as having a long put position. If you have “3 long puts,” then you have the right to sell 300 shares of some underlying stock at the strike price until the expiration date.

Short Option Position:

The position of an option writer which represents an obligation on the part of the option's writer to meet the terms of the option if it is exercised by its owner. The writer can terminate this obligation by buying back (cover or close) the position with a closing purchase transaction.

The term short option position means that an option was written, and the writer has some kind of obligation.

A call writer, for example, is described as having a short call position. If you have “4 short calls,” then you are obligated to sell 400 shares of some underlying stock at the strike price until the expiration date

A put writer is described as having a short put position. If you have “7 short puts,” then you are obligated to purchase 700 shares of some underlying stock at the strike price until the expiration date.

Opening Transaction:

Opening transaction is an addition or creation of, a trading position. Opening purchase transaction adds long options to an investor's total position, and an opening sale transaction adds short options. An opening option transaction increases the particular option's open interest.

Closing transaction:

Reduction or an elimination of an open position by the appropriate offsetting purchase or sale is a closing transaction. An existing long option position is closed by a selling transaction. An existing short option position is closed by a purchase transaction. This transaction will reduce the open interest for the specific option involved.