Say the iPhone 17, is going for $1k. You believe the price will rise on rumors Apple discontinuing the line up. You go to a retailer and ask to buy ¹an iPhone at today’s price in 3 months after you've saved up enough. The $1k price becomes a Strike and the retailer writes up a contract.

To hold the iPhone for you, the retailer charges you $20 upfront, which is now the Premium. Now you have an options contract that gives you the right to buy the iPhone at $1k in 3 months from that retailer.

In 3 months, you were right and the iPhone is now $1.1k. You now buy the iPhone at $1k and sell it for $1.1k, effectively netting a $100 gain. That $100 is also the value of the options contract on the expiry date. Minus the $20 premium, you’re up $80.

However, if you’re wrong and prices stagnates or drop, you’re under no obligation to buy you just lose the $20 premium.

The contract here is called a Call option. It gets its name from the buyer's right to call in the asset, as you just did.