{"id":7000,"date":"2022-02-21T20:24:35","date_gmt":"2022-02-21T12:24:35","guid":{"rendered":"https:\/\/slashtraders.com\/?p=7000"},"modified":"2025-09-29T17:37:52","modified_gmt":"2025-09-29T09:37:52","slug":"buy-to-open-vs-buy-to-close","status":"publish","type":"post","link":"https:\/\/slashtraders.com\/en\/blog\/buy-to-open-vs-buy-to-close\/","title":{"rendered":"The Difference Between Buy to Open and Buy to Close Orders"},"content":{"rendered":"<p class=\"wp-block-paragraph\">Do you know the difference between buy to open and buy to close when trading options?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They are the differences between an option buyer and an option seller. Today SlashTraders will show you the pros and cons of buying or selling options. So you know which trading style works better for you.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<span class=\"PxMWwvoZRHGLJte3kjSm1zd0Aq9g8QhY7BfNpa6uibK4nc5\"><iframe title=\"What Are the Differences Between Buy to Open and Buy to Close?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/mogWmsZ2pkE?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/span>\n<\/div><\/figure>\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-open\">What Is Buy to Open?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Buy to open is when you buy an option to open a trade. Which is a typical option buyer strategy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A bullish strategy for option buyers is to buy a Call. When the stock price goes up, the Call option can be exercised to buy shares below market price for a profit.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-1024x576.png\" alt=\"bullish buy call\" class=\"wp-image-7003\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">A bullish long Call strategy needs the stock price to go up to exercise the contract and buy shares below market price for a profit.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A bearish strategy is to buy a Put option to open. When the stock price goes down, we can exercise the Put option to sell shares above the market price for a profit.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-buy-put-1024x576.png\" alt=\"bearish buy put\" class=\"wp-image-7007\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-buy-put-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-buy-put-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-buy-put-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-buy-put-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-buy-put.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">A bearish long Put strategy needs the stock price to go down to exercise the contract and sell shares above market price for a profit.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-close\">What Is Buy to Close?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Buy to close is when you close a short option to settle an options trade, which is part of a sell to open strategy for option sellers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">A bullish option selling strategy is to <a href=\"https:\/\/slashtraders.com\/en\/blog\/cash-secured-put\/\" target=\"_blank\" rel=\"noreferrer noopener\">sell a Put<\/a>. When the stock price goes up, the option value will depreciate, and the seller keeps the premium for a profit.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-1024x576.png\" alt=\"bullish sell put\" class=\"wp-image-7010\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Sell a Put option for premium, then wait for the stock price to go up to depreciate the option value for a profit.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">A bearish option selling strategy is to <a href=\"https:\/\/slashtraders.com\/en\/blog\/sell-covered-call\/\" target=\"_blank\" rel=\"noreferrer noopener\">sell a Call<\/a>. When the stock prices go down, the Call option will become worthless, and the seller collects the premium for a profit.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-sell-call-1024x576.png\" alt=\"bearish sell call\" class=\"wp-image-7013\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-sell-call-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-sell-call-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-sell-call-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-sell-call-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bearish-sell-call.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Sell a Call option for premium, then wait for the stock price to go down to depreciate the option value for a profit.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-close\">Risks and Rewards of Option Buyers and Sellers<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">We open bullish option trades for MSFT that expire next month to illustrate the differences between buyers and sellers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An option buyer can trade an ATM Call by spending $935 in premium. If the stock price goes up, the maximum gain of the Call option is unlimited.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If MSFT drops in price, the maximum loss for the option buyer is the cost of purchasing the Call.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-risk-reward-1024x576.png\" alt=\"bullish buy call risk reward\" class=\"wp-image-7017\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-risk-reward-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-risk-reward-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-risk-reward-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-risk-reward-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-risk-reward.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The maximum gain of the Call option is unlimited, while the maximum loss for the option buyer is the cost of purchasing the Call.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">An option seller can trade an ATM Put to collect a $1,095 premium as income. If the stock price goes up to make the Put <a href=\"https:\/\/slashtraders.com\/en\/blog\/options-value\/\" target=\"_blank\" rel=\"noreferrer noopener\">option worthless<\/a>, the maximum gain is the premium collected.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">If the <a href=\"https:\/\/slashtraders.com\/en\/tools\/bear-call-spread-screener\/\" target=\"_blank\" rel=\"noreferrer noopener\">stock price drops<\/a>, the maximum loss for the option seller is buying the worthless stock at the strike price.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-risk-reward-1024x576.png\" alt=\"bullish sell put risk reward\" class=\"wp-image-7023\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-risk-reward-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-risk-reward-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-risk-reward-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-risk-reward-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-risk-reward.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The maximum gain of the short Put is the premium collected, while the maximum loss is buying the worthless stock at the strike price.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If we compare the risks and rewards of the two strategies, an option buyer has limited risks with unlimited rewards. While an option seller has unlimited risks with limited rewards.<\/p>\n\n\n\n<table id=\"tablepress-30\" class=\"tablepress tablepress-id-30\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\">Market expectation<\/th><th class=\"column-2\">Strategy<\/th><th class=\"column-3\">Maximum profit<\/th><th class=\"column-4\">Maximum loss<\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\">Bullish<\/td><td class=\"column-2\">Buy Call<\/td><td class=\"column-3\">Unlimited<\/td><td class=\"column-4\">Premium<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\">Bullish<\/td><td class=\"column-2\">Sell Put<\/td><td class=\"column-3\">Premium<\/td><td class=\"column-4\">Strike price x 100 - premium<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\">Bearish<\/td><td class=\"column-2\">Buy Put<\/td><td class=\"column-3\">Strike price x 100 - premium<\/td><td class=\"column-4\">Premium<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\">Bearish<\/td><td class=\"column-2\">Sell Call<\/td><td class=\"column-3\">Premium<\/td><td class=\"column-4\">Unlimited<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-30 from cache -->\n\n\n\n<figure class=\"wp-block-image aligncenter size-full\"><a href=\"https:\/\/slashtraders.com\/en\/pricing\/?utm_source=blog&amp;utm_medium=banner\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"971\" height=\"120\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner.png\" alt=\"slashtraders trial banner\" class=\"wp-image-7387\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner.png 971w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner-300x37.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner-768x95.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/03\/slashtraders-trial-banner-18x2.png 18w\" sizes=\"(max-width: 971px) 100vw, 971px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-close\">Probability of Profits of Option Buyers and Sellers<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Apart from risks and rewards, we can also compare the two option strategies with the probability of profit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A bullish Call option buyer needs to pay a premium to buy to open the trade, so we need the stock price to go up a great deal to offset the cost of premium before making a profit.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-probability-of-profit-1024x576.png\" alt=\"bullish buy call probability of profit\" class=\"wp-image-7030\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-probability-of-profit-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-probability-of-profit-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-probability-of-profit-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-probability-of-profit-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-buy-call-probability-of-profit.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The probability of profit for buying an ATM Call is less than 50%.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a result, the probability of profit for buying an ATM Call is less than 50%, lower than buying stocks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">A <a href=\"https:\/\/slashtraders.com\/en\/blog\/bottom-out-stock-bull-put-spread\/\" target=\"_blank\" rel=\"noreferrer noopener\">bullish Put option seller<\/a> collects a premium to sell to open the trade, so the breakeven price is actually lower than the strike price. A seller can profit even if the stock price doesn't move.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-probability-of-profit-1024x576.png\" alt=\"bullish sell put probability of profit\" class=\"wp-image-7033\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-probability-of-profit-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-probability-of-profit-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-probability-of-profit-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-probability-of-profit-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/bullish-sell-put-probability-of-profit.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The probability of profit for selling an ATM Put is greater than 50%.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So the probability of profit for selling an ATM Put is greater than 50%, higher than buying stocks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For a Call option buyer to profit, the stock price needs to move up as expected. While a Put option seller can profit as long as the stock price doesn't fall.<\/p>\n\n\n\n<table id=\"tablepress-31\" class=\"tablepress tablepress-id-31\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\">Strategy<\/th><th class=\"column-2\">Bullish stock price<\/th><th class=\"column-3\">Unchanged<\/th><th class=\"column-4\">Bearish stock price<\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\">Buy Call<\/td><td class=\"column-2\">Profit<\/td><td class=\"column-3\">Loss<\/td><td class=\"column-4\">Loss<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\">Sell Put<\/td><td class=\"column-2\">Profit<\/td><td class=\"column-3\">Profit<\/td><td class=\"column-4\">Loss<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\">Buy Put<\/td><td class=\"column-2\">Loss<\/td><td class=\"column-3\">Loss<\/td><td class=\"column-4\">Profit<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\">Sell Call<\/td><td class=\"column-2\">Loss<\/td><td class=\"column-3\">Profit<\/td><td class=\"column-4\">Profit<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-31 from cache -->\n\n\n\n<p class=\"wp-block-paragraph\">So selling options is a good way to control the odds of trading in your favour.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-close\">Impact of Theta Decay to Buying and Selling Options<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Options contracts have expiration dates, so an options trade is only profitable if the stock price moves as expected before expiration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">As time passes, <a href=\"https:\/\/slashtraders.com\/en\/blog\/option-greeks\/\" target=\"_blank\" rel=\"noreferrer noopener\">theta<\/a> will cause the option value to depreciate. If the option doesn't generate a profit before expiration, the premium paid for the option becomes worthless.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/theta-decay-1024x576.png\" alt=\"theta decay\" class=\"wp-image-7040\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/theta-decay-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/theta-decay-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/theta-decay-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/theta-decay-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/theta-decay.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Theta can cause the time value of an option to depreciate.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So theta decay works against the option buyer but favours the option seller. This allows a patient option seller to wait for the options to depreciate for a profit.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-close\">Different Ways to Close the Trades<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Now we know how the two different strategies enter <a href=\"https:\/\/slashtraders.com\/en\/blog\/what-are-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">option trades<\/a>, we can look at the differences in closing trades.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">After a trader buys to open a trade, there are two ways to close the trade:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>One is to exercise the option contract to either buy (Call) or sell (Put) 100 shares at the strike price.<\/li>\n\n\n\n<li>Another way is to sell to close the trade for cash.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">An option seller cannot exercise the option contract:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Wait for options to be exercised to sell (Call) or buy (Put) 100 shares at the strike price.<\/li>\n\n\n\n<li>Or settle the position in cash with buy to close.<\/li>\n<\/ul>\n\n\n\n<table id=\"tablepress-32\" class=\"tablepress tablepress-id-32\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\">Strategy<\/th><th class=\"column-2\">Settle in shares<\/th><th class=\"column-3\">Settle in cash<\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\">Buy Call<\/td><td class=\"column-2\">Exercise to buy 100 shares<\/td><td class=\"column-3\">Sell Call to close<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\">Sell Put<\/td><td class=\"column-2\">Exercised to buy 100 shares<\/td><td class=\"column-3\">Buy Put to close<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\">Buy Put<\/td><td class=\"column-2\">Exercise to sell 100 shares<\/td><td class=\"column-3\">Sell Put to close<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\">Sell Call<\/td><td class=\"column-2\">Exercised to sell 100 shares<\/td><td class=\"column-3\">Buy Call to close<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-32 from cache -->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662fbuy-to-close\">Seller-Specific Option Rolling Strategy<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A unique closing strategy for option sellers is rolling. This is where the seller combines buy to close with sell to open and extend an options trade to a later expiration date.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If an earlier bullish short Put option on MSFT was wrong, it could become ITM at a loss. If we maintain a bullish outlook on MSFT, we can buy to close the trade at 14 days to expiration, then sell to open a Put that expires next month. This way the premium from the later date Put can offset the initial loss.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/roll-14-dte-put-1024x576.png\" alt=\"roll 14 dte put\" class=\"wp-image-7047\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/roll-14-dte-put-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/roll-14-dte-put-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/roll-14-dte-put-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/roll-14-dte-put-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/roll-14-dte-put.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Buy to close the 14 DTE Put, then sell to open a Put that expires next month.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\"><a href=\"https:\/\/slashtraders.com\/en\/blog\/roll-put-call-credit-spread-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">After the rolling transaction<\/a>, we are left with a short Put option that expires next month, allowing us more time to wait for the stock price to rebound in a bullish trend for a profit.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/28-dte-short-put-1024x576.png\" alt=\"28 dte short put\" class=\"wp-image-7051\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/28-dte-short-put-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/28-dte-short-put-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/28-dte-short-put-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/28-dte-short-put-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/28-dte-short-put.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">After rolling, we are left with a short Put option that expires next month<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Once we understand <a href=\"https:\/\/slashtraders.com\/en\/blog\/roll-options\/\" target=\"_blank\" rel=\"noreferrer noopener\">how rolling works<\/a>, as long as our prediction about the price trends doesn't change, we can continue to roll and delay the option expiration to wait for profit from a rebound.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u73fe\u5728\u6700\u597d\u7684\u770b\u6f32sell-to-open\u6a5f\u6703\">Best Bullish Sell to Open Options Trade Right Now<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">From the <a href=\"https:\/\/slashtraders.com\/en\/tools\/bull-put-spread-screener\/\" target=\"_blank\" rel=\"noreferrer noopener\">list of trades in the Bull Put Spread Screener<\/a>, ZG is the best bullish Put Spread right now:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It has 143% upside.<\/li>\n\n\n\n<li>It has been on a bullish trend for 6 days (BullC:6 UpTrend).<\/li>\n\n\n\n<li>Long Signal Days shows it bottomed out 13 days ago.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"575\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/zg-bull-put-spread-screener-1024x575.png\" alt=\"zg bull put spread screener\" class=\"wp-image-7074\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/zg-bull-put-spread-screener-1024x575.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/zg-bull-put-spread-screener-300x168.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/zg-bull-put-spread-screener-768x431.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/zg-bull-put-spread-screener-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/zg-bull-put-spread-screener.png 1130w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">ZG is the best sell to open Bull Put Spread right now.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">We can sell an ATM Bull Put Spread that expires next month. The trade uses $210 of buying power with a maximum profit of $290, giving us a return on capital of 138%.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/sell-zg-put-spread-1024x576.png\" alt=\"sell zg put spread\" class=\"wp-image-7077\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/sell-zg-put-spread-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/sell-zg-put-spread-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/sell-zg-put-spread-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/sell-zg-put-spread-18x10.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2022\/02\/sell-zg-put-spread.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Sell to open a ZG ATM Put Spread that expires next month has a maximum return on capital of 138%.<\/figcaption><\/figure>\n\n\n<p><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Not only can a patient option seller profit from theta decay, but one can also use the rolling strategy to use future premiums to offset losses and wait for a market rebound.<\/p>\n\n\n\n<p class=\"has-ast-global-color-4-background-color has-background wp-block-paragraph\"><a href=\"https:\/\/slashtraders.com\/en\/blog\/slashtraders-vs-sp500\/\" target=\"_blank\" rel=\"noreferrer noopener\">SlashTraders vs S&amp;P 500: 450% Outperformance, Verified Trades and How to Copy Every Alert<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>The difference between buy to open and buy to close lies in the roles of the options buyer or seller. We discuss the pros and cons of buying and selling options to help you determine which trading strategy is best suited for you.<\/p>","protected":false},"author":1,"featured_media":7001,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"plain-container","ast-site-content-layout":"normal-width-container","site-content-style":"unboxed","site-sidebar-style":"unboxed","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","_wp_rev_ctl_limit":"5"},"categories":[3],"tags":[56,12,64,45,14,11],"class_list":["post-7000","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-cn","tag-en","tag-es","tag-msft","tag-options","tag-tw"],"_links":{"self":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/7000","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/comments?post=7000"}],"version-history":[{"count":5,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/7000\/revisions"}],"predecessor-version":[{"id":13928,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/7000\/revisions\/13928"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/media\/7001"}],"wp:attachment":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/media?parent=7000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/categories?post=7000"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/tags?post=7000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}