Sell to Open


Sell to Open

Informal; to sell an option contract in order to open a position. That is, when one sells to open, one is beginning to implement an option strategy that requires a net short position in order to be profitable. For example, one may write a call expecting it not to be exercised, allowing one to keep the premium (or sale price). Alternatively, selling to open may be the first of several steps in a complex strategy. See also: Sell to close.