You relinquish your rights and realize a profit or loss based on the difference between your initial BTO premium and the current STC premium.
You expect the underlying asset's price to rise (bullish).
This order is used to a new long position. When you execute a BTO order: buy to open sell to close
You expect the underlying asset's price to fall (bearish). 2. Sell to Close (STC): Exiting the Trade
It typically increases open interest , as a new contract is often being created between you and a seller. Strategic Intent: You relinquish your rights and realize a profit
In options trading, "Buy to Open" (BTO) and "Sell to Close" (STC) are the two halves of a standard . They describe the lifecycle of a trade where you purchase a contract first and exit it later by selling it. 1. Buy to Open (BTO): Entering the Trade
It can decrease or leave open interest unchanged, depending on whether the buyer is also opening or closing a position. When you execute a BTO order: You expect
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.