You relinquish your rights and realize a profit or loss based on the difference between your initial BTO premium and the current STC premium.
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 buy to open sell to close
You expect the underlying asset's price to fall (bearish). 2. Sell to Close (STC): Exiting the Trade You relinquish your rights and realize a profit
It can decrease or leave open interest unchanged, depending on whether the buyer is also opening or closing a position. When you execute a BTO order: It typically
This order is used to a new long position. When you execute a BTO order:
It typically increases open interest , as a new contract is often being created between you and a seller. Strategic Intent: