The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “What does buy to open mean in options?” Buy to open, buy to close, sell to open, sell to close, all very confusing terminology when you start getting into the world of options trading. Now, this is different than stock trading because what most people are used to is simply just buy stock at a low price and sell stock at a high price. But in the world of options trading, you have all these different terminologies for how the account position is starting to change and evolve. Buy to open basically means exactly what it sounds like. That is you are buying options, either net options, a spread, you’re buying a spread or you’re buying individual option contracts and you are opening a position and you have a new position open that needs to be closed in the future. Now, this is important because in the world of options trading as in the world of stock trading though it’s just not as