Even though there is a shockingly wide range of trading orders available for options traders, there are four central ones that get the most use: Buy to Close, Sell to Close, Buy to Open and Sell to Open. Sell to Close is used to sell any option — including both put options and call options — that you have right now. You can use Sell to Close orders for closing any open long position, as long as the options contract has not yet expired.
- Options are the types of trading instruments in the world of all trading instruments that have the most types of trading orders.
- The first thing that astonishes beginners to options trading and where option traders make the most mistakes is the fact that options has a variety of trading orders.
- Understanding the trading orders in options trading is extremely important. There are four of them: Buy to Open, Sell to Close, Buy to Close, and Sell to Open.
“When you Sell To Close (STC) an options contract, you are actually selling the options contracts that you own to a market maker in order to realize a profit or loss. To get an immediately fill, you should use the Sell To Close order at the option’s BID price.”