yes, you move your finger around, making the note slightly higher/lower/higher lower...

There are different kinds of vibratos, singers use them too, and you can listen to Ella Fitzgerald, Sinatra, to see how they make their notes vibrate at the end of their phrases.

One of guitar's most famous vibrato is BB king's, made by shaking the hand really fast (reminds me of a bee) you can listen to people's vibrato, but you have to find your own (I should say your owns, since you should have several vibratos)