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Options 101
Buy to Open, Sell to Close, Sell to Open, Buy to Close: The Four Options Actions
Stocks have buy and sell. Options split each into “open” and “close” — and getting the label wrong can hand you a position you never meant to hold.
NoVo Options Trading · 2026
When you trade shares, you buy and you sell. Options add a second dimension: every order also declares whether you're opening a new position or closing an existing one. That gives four actions, and knowing them prevents an expensive mistake.
The four actions
Buy to Open (BTO) — open a new long position (this is how you buy a call or put to go long).
Sell to Close (STC) — close a long position you already hold (how you exit that call or put).
Sell to Open (STO) — open a new short position (you're now the option seller, with the obligations that brings).
Buy to Close (BTC) — close an existing short position by buying it back.
Why the labels matter
The danger is confusing “sell” the exit with “sell” the short. If you mean to close a long call but the order is set to Sell to Open, you don't flatten — you open a brand-new short option on top, taking on obligations and assignment risk you never intended. Most platforms guard against this, but the responsibility is yours.
“Sell” means two different things in options. To exit a long, you Sell to Close — not Sell to Open.
For a long-only scalper
If you only ever buy single options, your whole life is two actions: Buy to Open to enter, Sell to Close to exit. You'll never be assigned and never carry a short's obligations. Sell-to-Open only enters your world if you deliberately sell options or spreads. Trading through NoVo, the open/close action is handled correctly for you as part of the order — one less place to fat-finger.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.