Buy To Close Option Example Apr 2026

You Sell to Open (STO). You receive a "premium" (cash) and now have a negative position (e.g., -1 contract).

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. buy to close option example

Because the stock went up, that $100 Put you sold is now less valuable. It is now trading for only . The Closing Move (Buy to Close): You Sell to Open (STO)

You Buy to Close (BTC). You pay to buy that contract back, bringing your position to zero. A Concrete Example You pay $50 to buy the contract back

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You collected $300 and paid $50 to get out. Your total profit is $250 . Why use "Buy to Close"?

If the stock moves against you, you BTC to prevent further losses.