When buying an option, what does “buy to open” mean?

All “buy to open” means is that you are opening an options trade by buying a call. Once your trade is executed, the call option shows up in your brokerage account. From then on, it will fluctuate in value up and down.

Over time, we will send you an email alert to take profits (or cut losses) by “selling to close” the option. Selling to close will close the trade, and the cash proceeds from selling the option will be deposited in your account.

It’s important to note that in this service, we will only make two types of options orders: “buy to open” and “sell to close.

For more information on options investing, click here to view our primer.

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