A graphic used as the featured image that says buying to open and selling to close
Finance

Buying to Open and Selling to Close

If you buy to open a position by buying a call or put – you are long an options contract. If you’re long a call or put, you hope to sell the options contract at a higher price – i.e. you’d sell the call or put to close the transaction. If you sell to open a position by selling a call or put – you are short an options contract. If you’re shot a call or put, you hope to buy the options contract at a lower price – i.e. you’d buy the call or put to close the transaction.

Finance

The Expiration Cycle

Simply stated, when an option expires, it ceases to exist.  After expiration, the owner of the option has no rights, and the seller of the option has no obligations.  An option holder must decide what to do with their option before the expiration date.  According to Investopedia, “the concept of time is at the heart of […]