When an investor takes a short position on an option contract by selling (“writing”) a call or put option, he or she is opening a position, which creates more open interest in an underlying security which will be handled by the brokerage house, and this is called “selling to open.”
If the price changes in the underlying security in an unfavorable way, the investor will seek to get out of the short position he holds on the options contract before the option’s expiration date. To do so, the investor must buy back the option (or, really, cancel out the position by buying the same kind of contract that he or she previously sold short).
Canceling out the open position is called “closing” the position, and is basically the same as covering a short. In this instance, the investor sold to open and bought to close, but at other times an investor might buy to open and sell to close.
What does “Buy to Open” Mean?
What Does 'Buy to Cover' Mean?
What does “Buying on Weakness” Mean?
An options contract starts when the option is exercised, meaning that the option or buy or sell the security is utilized
Acquiring technologies to abate their environmental impact, and the overhead of such projects is called Abatement Cost..
In general, bonds rated below BBB on S&P and Fitch's scales are typically called "junk bonds." These bonds usually...
Wondering if you should invest in gold? Discover the pros and cons of gold investment with Tickeron's comprehensive analysis and guides.
Keogh plans have the ability to include many investment options, from stocks to bonds, certificates of deposit to cash value life insurance, and so on.
Taxes pay for the entirety of Medicare part A. The social Security Administration, which is funded by taxes deducted...
The assets within the ABS generally tend to consist of different kinds of debt receivables, such as credit cards, auto loans, home equity loans, and so forth.
A Dividends Received Deduction (DRD) is a tax deduction available to corporations when they are paid dividends from...
The 1099-MISC form is filed by the payer, which is the business (whether for-profit or not-for-profit) making the...
Form 8891 was previously used by individuals with retirement plans held in Canada when they were living in America