Buy To Open Sell To Close May 2026

It can decrease or leave open interest unchanged, depending on whether the buyer is also opening or closing a position.

Most traders use STC to capture the option's remaining extrinsic value (time value and volatility) rather than exercising, which only captures intrinsic value. Comparison Summary Master the Basics: 4 Key Options Trading Strategies buy to open sell to close

This order is used to a new long position. When you execute a BTO order: It can decrease or leave open interest unchanged,

You pay a premium (debit) to a seller to acquire the rights of a contract. Result: You become the "holder" or "buyer" of the option. buy to open sell to close