What is an option close?

The option close is a simple yet effective close. It involves giving the client two options with an ask to buy. Keep in mind that you want to keep this to two… not three… not five… but two options. The reason this is important because the more options you give your clients the more confused they may get.

Do options expire at open or close?

According to NASDAQ, options technically expire at 11:59 AM Eastern Standard time on the date of expiration, which is a Saturday, oddly enough. Public holders of options contracts, however, must indicate their desire to trade no later than 5:30 PM on the business day preceding the option expiration date.

What does buy to close mean?

"Buy to close" refers to terminology that traders, primarily option traders, use to exit an existing short position. In market parlance, it is understood to mean that the trader wants to close out an existing option trade. Technically speaking, it means that the trader wants to buy an asset to offset, or close, a short position in that same asset.

What is a buy-to-close option?

There is a nuanced difference between a buy-to-close option and a buy-to-cover purchase. The former refers mainly to options, and sometimes futures, while the latter typically refers to stocks only. The end result is the same in both cases. Essentially, it is the buying back of an asset initially sold short.