If you’re trading equity options, a call gives you the right, but not the obligation, to buy a parcel of shares for a pre-determined exercise price on or before a pre-determined expiry date. A put is similar, except it gives you the right to sell the shares, rather than buy them.
If you’re trading index options, you receive a cash payment if the underlying index has reached the exercise level on the expiry date. A call option pays if the index has climbed above the exercise level, while a put option pays if the index has fallen below that level.