Buy To Open Sell To Close Site

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

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

You expect the underlying asset's price to fall (bearish). 2. Sell to Close (STC): Exiting the Trade Most traders use STC to capture the option's

This order is used to a new long position. When you execute a BTO order: You expect the underlying asset's price to fall (bearish)

It typically increases open interest , as a new contract is often being created between you and a seller. Strategic Intent:

You expect the underlying asset's price to rise (bullish).

You relinquish your rights and realize a profit or loss based on the difference between your initial BTO premium and the current STC premium.