Hi, I am new to Puts. I usually do Call Options. I need some tips.
I am on Etrade and I don't want to buy or sell my stock. If I want to do Puts, how should I buy? " Buy to Open" ?
Then when I see I am making money on the Put option, how do I sell it without having to buy or sell anything? Should I be using "Sell to Close" option?
These are the options I use when trading Call Options but I am confused as to how these work for PUTS.
Thanks !
Posted by cosmicPringles
1 Comment
The terminology is exactly the same whether you’re talking about calls or puts:
“Buy to open” – you pay the premium and hold the option
“Sell to open” – you receive the premium and someone else has the option.
“Sell to close” – you sell the option that you previously bought
“Buy to close” – you are buying the option back that you previously sold (to open)