Buy To Close Call Option at Buying

Buy To Close Call Option. You can sell shares at $35 against your call options at the $30 strike, which means that with the calls you hold, you can buy shares at $30 — a. There are essentially two primary situations in which it may make sense to close out a profitable covered call trade early.

For short positions, you have buy to close (and sell to open). The purpose of a buy to close transaction is to close out any short option position that required you to sell to open in order to initiate the trade. As you saw above, buy to open (and sell to close) applies to long calls and puts.

Sell to close is an options trade order and refers to closing out (selling) a long position in an options contract options: When to close a covered call trade early. Buy to open or buy to close? If you are sure that a stock is going to pop up a few points before the next option expiration date, it is the most profitable (and the most risky) to buy a call option with a strike price slightly higher than the current stock price.