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Investments glossary

Buy to Open

Buy to open is a term used by brokerages to represent the establishment of a new (opening) long call or put position in options. If a new options investor wants to buy a call or put, that investor should buy to open. A buy-to-open order indicates to market participants that the trader is establishing a new position rather than closing out an existing position. The sell to close order is used to exit a position taken with a buy-to-open order.

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