Buy To Open

A "buy to open" is often used when you want to pray that you'll make money in the options market by purchasing a call (predicting the price of a stock will go up) or a put (predicting the price will go down).

The cost of the option will be debited from your account, and then you will wait to see if your predictions are correct. You will make a profit if the stock price goes higher than your break-even point on your call option, or fall below your break-even point for your put option. Once that happens, you need to buy the call or put option back using a “sell to close” order.

If you are simply buying a particular stock for the first time, your first transaction is also a “buy to open” in order to include it in your portfolio. When you sell all your holdings for the stock, that is the sell to close. Very different from "Sell Two Clothes," which you'll find all over the place on eBay.