– Glossary

Closing sale (sell to close)

A transaction where an investor who initially bought an option intends to liquidate his or her purchased position by selling (in a \"closing sale transaction\") an option with the same terms as the one he or she purchased. This transaction will reduce the open interest for that option. Collar - A collar is an options strategy that involves the purchase of a put option and the sale of a call option on the same pre-owned underlying stock. The call and put do not have the same strike price (the call is always at a higher strike than the put), nor must they necessarily have the same expiration date.

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