Southwest Management Group: Services
An Option gives the buyer the right, but not the obligation to buy (or sell) a certain asset at a specific price at any time during the life of the contract.
Purchasing a Call gives you a specific locked-in price at which you have the right, but not the obligation, to buy a futures contract on a commodity that you expect to increase in value. For example, if you predict that the price of gold will go up, you'd buy a gold Call option.
Purchasing a Put gives you a specific locked-in price at which you have the right, but not the obligation, to sell a futures contract on a commodity that you expect to decrease in value. Thus, if you look for the price of gold to go down, you'd buy a gold Put option.
One easy way to remember which is which is to think of the terms "call up" and "put down." A Call is a way to profit if prices go up. A Put is a way to profit if prices go down. If and when the market price of the commodity moves in the direction you anticipated, this will be reflected on a daily basis in the value of your option.
The text above is, at most, a very brief and incomplete discussion of a complex topic. Option trading has its own vocabulary and its own arithmetic. If you wish to consider trading in options on futures contracts, you should discuss the possibility with your broker.
Similarly, your broker or advisor, as well as the exchanges where options contracts are traded, are your best sources for detailed information about options trading.