To Open Sell To Close — Buy

You expect the underlying asset's price to rise (bullish).

You pay a premium (debit) to a seller to acquire the rights of a contract. Result: You become the "holder" or "buyer" of the option. buy to open sell to close

Most traders use STC to capture the option's remaining extrinsic value (time value and volatility) rather than exercising, which only captures intrinsic value. Comparison Summary Master the Basics: 4 Key Options Trading Strategies You expect the underlying asset's price to rise (bullish)

It typically increases open interest , as a new contract is often being created between you and a seller. Strategic Intent: Most traders use STC to capture the option's

You relinquish your rights and realize a profit or loss based on the difference between your initial BTO premium and the current STC premium.

This order is used to a new long position. When you execute a BTO order: