I'm asking about etymology, and not what these options are. The answers beneath don't feel convincing; can't 'call' and 'put' be interchanged in them? I'll abbreviate Call Option to CO, and Put Option to PO. From Quant SE:

Not as much on origin of this, but some analogy that I find helpful:

Call - think of an open auction when bidders call out their prices for an auctioned item. So with a call option you've got a privilege to call the strike price, effectively having a right to buy the underlying asset.

Put - think that you own a privilege to put the asset for sale at the strike price, effectively having a right to sell the underlying asset.

Mind that for an option buyer this is optional to exercise it, yet for the option writer it's an obligation to transact, should the buyer opt to exercise it.

But can't I be said to:

  1. for a CO, "put" (to the CO seller) to buy the security at the strike price (for a CO)?

  2. for a PO, "call" (to the CO seller) to sell the security at the strike price?

From Quora:

When you buy a call and exercise it you are receiving stock that you have "called" up from the person that sold you the call, the right to buy. When you buy a put you have purchased the right to sell the stock, or "put it" to the person who sold you the put.

Again, can't I say that a:

  1. CO is when a CO seller "puts" the call option to the CO buyer?

  2. PO is when a PO buyer is "calling" the PO seller to buy the security from the buyer?

  • To some extent, the answer is simply "that's the way those concepts came to be named." The sense of put as a venture or attempt is attested from 1661 in the OED, of the option to sell assets at a certain price at a certain date from 1718. Call meaning a demand for payment is attested from 1673, and of the option to demand assets at certain price at a certain date from 1825. They could have called them flibbertygibbets, but traders value brevity. – choster yesterday

An option in this context is a right to do something, so it makes sense to describe the option in terms of that right: a Put option is the right to put (sell) a security and a Call option is the right to call (buy) a security.

There are two parties involved:

  • the option holder has the right to exercise the option. They could have acquired the option by buying the option, or it might have been granted to them as part of their remuneration, etc.

  • the counterparty to the option holder (I'll just call them the counterparty here) has an obligation to be the counterparty to the underlying transaction if the option holder exercises the option: the counterparty must buy whatever was Put and sell whatever was called.

Since options have two parties, you can describe it from either perspectives or even both. Let's consider Put options, which you propose to define (Q2, Q4) as the counterparty "calling" the option holder to buy the security from the option holder.

Although you can describe a Put as the counterparty's obligation to buy, the transaction isn't done at their option. The counterparty has no choice in the matter. If the option holder chooses not to sell, the counterparty can't "call" the security; and if the option holder chooses to sell, the counterparty can't refuse.

You can even describe a Put as the option holder’s right to sell and the counterparty’s obligation to buy. However, connotation of the word "option" is one-sided. The derivative belongs to the option holder; the transaction triggers at their option. As such, it makes sense to describe Put option from the option holder's perspective: they hold an option to sell the underlying security.

Likewise, it makes sense to describe a Call option as the option holder's option to buy the underlying security.

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    Sorry, but I don't see how this answers questions 1-4? – Greek - Area 51 Proposal Jan 12 at 4:18
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    I understood Q1-4 as proposals to consider the options from the perspective of the option seller (the one I’ve called the counterparty in my answer). My answer says that you could, but the trade is not done at their option. If I’ve misunderstood your question, I apologise and request clarification. – Lawrence Jan 12 at 4:52

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