Entries & Exits

Buy to Open vs Sell to Open

Buy-to-open (BTO) orders open a new position and require paying a debit. Sell-to-open (STO) orders open a new position and receive credit. The premium paid or collected is applicable to single and multi-leg strategies.
Buy to Open vs Sell to Open
Kirk Du Plessis
Apr 19, 2021

Opening orders are very important when trading options. In this video I'll quickly cover Buy to Open (BTO) vs Sell to Open (STO). Buy to open orders are new trades that you enter after paying a debit for some strategy or spread. Sell to open orders are new trades that you enter by receiving a credit or premium from selling some strategy or spread.

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Buy to Close vs Sell to Close
Buy-to-close (BTC) orders pay a debit and close a position that was opened selling options. Sell-to-close (STC) orders receive a credit and close a position that was opened buying options. The premium paid or collected, relative to the opening order, determines your profit or loss on a trade.

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