How To Close An Option Position

Selection contracts can be held to expiration or, as they often are, traded prior to expiration. With multi-legged options, the unabridged position or any legs inside the position can be airtight at whatever time prior to expiration. Below are the simple steps to close an existing multi-legged option position from the nautical chart.

1. To shut the entire multi-legged position, right-click on the existing option position on the chart

This opens the menu allowing the position or legs to be Closed or Rolled (click hither for instructions on rolling a single-legged option).

2. Click the endmost choice from the menu

In this example, Sell to Close three Phone call Butterfly...(Each pick contract will have its specific close selection.)

This volition identify a close position gild ticket for the multi-legged option on the chart.

The close position order ticket volition always exercise these things:

1. Select the correct position size (in this case, 2 contracts)
2. Place the order on the right side of the marketplace (e.g.sell to shut on long positions; buy to embrace on short positions)

3. If no changes are desired, simply click Sell to Close and confirm to place the order.

4. Gear up a Limit Price (optional)

The Limit slider shows the spread between the natural (in this case, the bid) and the far (in this case, the ask). To set a toll (internet premium) within the spread at which to identify your order, click at any signal on the slider. The limit value is seen in the toll field next to the "Lmt" order blazon.

5. Apply a Step to Limit order (optional)

Another manner to take advantage of the spread is the Stride to Limit order. Choose the Step to Limit order from the drop downwards bill of fare. (A Step to Market order acts the same as a Stride to Limit lodge except that if no preferable fill is achieved during the step period, the order then moves to the Market price.)

Set the beginning of the slider at the limit toll desired for the initial club. This will be the limit price at which the order will be entered.

Over the predetermined fourth dimension period the limit price (internet premium) will be automatically modified up from the initial entry price toward the Natural (or selected) price. The pace to limit order will endeavour to secure a preferable fill cost in this process. Modification stops if no preferable fill is received and the limit price reaches the Natural.

6. Submit the order

Click Place Order to confirm and submit

7. To shut a single leg of the multi-legged position, correct-click on the existing option position on the chart

This opens the card allowing the position or legs to exist Closed or Rolled.

8. Click the closing selection from the menu for the fractional strategy or single leg to be closed

In this example, Sell to Shut 3 JulWk2Call 78.50

This volition place a close position club ticket for the selected choice leg(s) on the nautical chart.

9. Repeat steps 3-6 for each leg(s) to be closed

The trading tools piece of work on either a LIVE brokerage account or a Paper (simulated) trading account. Live market trading requires an business relationship with TC2000 Brokerage (www.TC2000Brokerage.com).

Source: https://help.tc2000.com/m/69435/l/765613-how-to-close-a-multi-legged-option-position

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