Most traders use STC to capture the option's remaining extrinsic value (time value and volatility) rather than exercising, which only captures intrinsic value. Comparison Summary Master the Basics: 4 Key Options Trading Strategies
You relinquish your rights and realize a profit or loss based on the difference between your initial BTO premium and the current STC premium. buy to open sell to close
This order is used to a new long position. When you execute a BTO order: Most traders use STC to capture the option's
You expect the underlying asset's price to fall (bearish). 2. Sell to Close (STC): Exiting the Trade buy to open sell to close