Options trading: buy/sell to open/close terminology

@BobBaerker's answer addresses your key questions and it got my +1 vote.

However, since your question specifically pertains to terminology, I would like to add my pedantic two cents' worth to address confusion surrounding the terms "long" and "short" as they relate to option contracts:

• If you buy to open an option contract, then you're long the contract — whether a put or a call.

  similarly...

• If you sell to open (write) an option contract, then you're short the contract — whether a put or a call.

So, characterizing the writing of put contracts as "this is a long position" as in your #2 is incorrect. If you sold to open some puts, you unequivocally established a short position in the puts. Your portfolio would show a negative quantity of puts until one of: (a) you buy to close enough same puts to cover the short position, (b) the puts expire worthless, or (c) the holder exercises the puts and you're sold/put the underlying shares at the strike price.

I suggest not using "long" and "short" to describe how your overall financial position may or may not benefit based on price movements in the underlying. In the put writing example, yes it is true you'll have profited by capturing premium if, by expiration, the price of the underlying rises above or remains above the strike price for the puts you wrote (and you were not assigned early).

However, such profit from put writing does not make a short put similar to a long position in the underlying! If you actually had a long position in the underlying, your upside would be unlimited — while the most you can make from a short put is the premium received.

I prefer the terms "neutral", "bullish", and "bearish" (and sometimes with a "weak" or "strong" modifier) to describe the kind of bet I'm making with any particular option strategy, with respect to the underlying. I use "long" and "short" to strictly describe whether I have a positive or negative quantity of a security.