Buy To Close Option Example Apr 2026

Imagine it’s . You think Stock XYZ (trading at $105) won’t drop much further. The Opening Move (Sell to Open): You sell one $100 Put Option expiring in a month. You receive $300 in premium immediately. Status: You are now "Short" 1 Put. The Wait: Two weeks pass. Stock XYZ rises to $110.

Think of it as the "undo" button for a trade where you started by collecting cash upfront. buy to close option example

You don't want to wait for expiration, so you place a order. You pay $50 to buy the contract back. Status: Your position is now 0. Imagine it’s

If you’ve made 50–80% of the max profit, many traders BTC to "take the money and run." buy to close option example