You are here: HomeOptionsBasic PositionsWhat are the Various Courses of Action available to Option Buyers and Sellers During the Lifetime of the Option?

What are the Various Courses of Action available to Option Buyers and Sellers During the Lifetime of the Option?

Buyer closing out procedure

The buyer of an option can close out by selling an option of the same option type (call or put) with identical option lifetime and identical exercise price.

Seller closing out procedure

The seller of an option can close out by buying an option of the same option type (call or put) with identical option lifetime and identical exercise price. In doing so, the seller is released from his risk.

bmw short call closing

Both must enter 'C' for closing when placing the order so that Eurex knows that it is dealing with a close-out trade. Conversely, the trader must enter "O" for opening when he wants to open a new position.

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