Under what put circumstance would you sell to close (sell) an option position?

Answer 1

Hi Skaaaaahhh!

I would sell to close a position if I didn't want to exercise the option and we were near expiration.

Further, I would close out an option position if it (or the underlying) hit either my price target or my stop loss position.

Hope that helps!

Answer 2

You didn't say what type of contract you are closing, put or call. "Sell to close" is one way to conclude an options transaction. The other way is to take delivery of, or transfer out the stock itself. This way normally occurs at option expiration.

So you would sell to close if you want out of the contract before it expires and you do not want to work with the underlying stock.

Answer 3

in case you purchased to open a positioned place and the underlying's cost moved on your prefer (down interior the case of a positioned), you may prefer to sell to close previous to expiration to capitalize on the earnings and dodge having to grant the particularly underlying. it particularly is consumer-friendly determination belongings you may grasp earlier procuring and promoting, in any different case your wallet gets picked sparkling in that marketplace.