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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1200  
Subject: Re: Help with Options Exit Date: 1/25/2005 7:25 PM
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You wrote, If I make a "Buy to Open" on a single call contract with no intent of exercising the option then how would I exit the contract? Is it a "Buy to Close" or a "Sell to close"?

Example. I place a "Buy to Open" on GE FG (GE June 2005) which is in the money, and I buy a single contract at the ask price of $2.00 for a total of $200 plus commission. My intent is to sell it one month prior on May 18th, a Wednesday. I never intend to purchase the shares. How would I exit on my exit date assuming the price goes up.

If you buy a contract, you must sell it to close it. If you "Buy to Open", you must "Sell to Close" if you want to abandon that position. This is no different from when you buy or sell stocks - you're just talking about a contract instead of a certificate.

- Joel
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