Sell to Close

You buy a call option that's set to expire a month from now. That night, you win the MegaBalls lottery. No more grinding it out on an options desk for you. You’re moving to Tahiti to become a painter. But first, you have to square up your option positions. So you sell that call option you just bought.

That situation defines a sell-to-close situation. You aren’t selling a call contract to make money or as part of a complicated strategy. You’re selling it to close out your existing position.