I’ve been trading for a while but still find sell to close orders confusing. I see this option in my trading app but I’m not sure when to use it.
Can someone explain this simply? I’ve made mistakes before because I didn’t get how to close positions correctly.
You’re basically selling what you bought to exit a trade.
Sell to close exits your long positions. Use it when you reach your profit target or need to limit losses. The platform tracks everything automatically.
When I started trading, I accidentally lost $200 on Apple options. Meant to close my position but clicked the wrong button and opened a new one instead.
Sell to close = telling your broker you want out of a trade you already own. Like returning something to a store.
Now I always double-check the order type before hitting submit.
Sell to close simply means you’re exiting a position you own. You’re selling to get out of a trade. Many mistakes occur when traders rush and don’t pay attention to what they’re doing. Always double-check that you’re clicking the correct button before confirming your order. Careful management of trades helps avoid these issues.
Selling to close means you’re exiting a position by selling an asset you already own. If you have a call option and decide to sell, that’s when you’d use it.
Imagine this as a two-step process: you buy to open a position and then sell to close it when you want to exit. Your trading app recognizes that you’re ending an existing trade rather than starting a new one.
It’s best to use this option when reaching a profit target or if you need to limit your losses.