SELL TO OPEN

Sell To Open is a phrased used in options. It is when a short position opens in an option transaction which means that the investor is starting or opening an option trade through the sale and the establishment of a short position in an option. This action allows for the receipt of premium paid from the buyer to the seller on the other side of the transaction. Sell To Open may be initiated on a put option, call option, and any other combination of either depending onthe trade bias (neutral, bearish, bullish) to be employed.