The fastest way to understand an option is to draw what it pays at expiry against the price of the underlying. Buy a call with a $100,000 strike for $4,000: below the strike it expires worthless and you lose the $4,000. Above the strike you make a dollar for each dollar of rise, and you break even at $104,000.
A buyer's loss is capped, a seller's isn't
A put works the other way round. It gains as the price falls below the strike, with a loss limited to the premium paid. The seller of either option has the mirror image: a small known gain and a loss that can run on, which for a naked call is unlimited.
Before expiry the option also carries time value, so its price curve sits above these lines. The diagram shows the end state.
A long call: lose the premium below the strike, gain above it. Strike $100,000, premium $4,000 (made-up figures).
