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Strategies & Market Trends : OPTION TRADING-30 DAYS OR LESS
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To: molemania who wrote (1970)7/18/1997 5:06:00 AM
From: George Mc Geary   of 1986
 
Dave,

When you first execute an order in options you have an open position, wether you buy or sell. You have an exposure, you are "OPEN". Then when you sell your purchase or buy back your sell you are "CLOSING" your open position.

Lets say you are wanting to buy some call options on xyz stock. You will buy, ("buy to open" a position) say at $2.00 then, the option goes to $5.00 and you decide to sell ("sell to close") the option, closing your open position.

Now lets say you are wanting to sell some call options on xyz stock that you own. You will sell, ("sell to open" a position) say at $5.00 then, the option you sold goes to $2.00 and you decide to buy ("buy to close") the option back, closing your open position.

Here are two sites that may answer some other questions you may have: cboe.com:80/intro/glossary.html
invest-faq.com
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