Opening Transaction


The term opening transaction refers to the process of creating a position taken by an investor in the options market.  The opening transaction creates the rights and obligations under an options contract.


An opening transaction is any process that effectively creates a position in the options market.  An option can open in several ways, including an investor establishing a long or short position with respect to call or put options.  For example, an investor can write a call option which can be exercised at a later date.  The writing of the option would be the opening transaction, while exercising a right would be a closing transaction.

Although less common, the term opening transaction can also refer to the opening price paid for a stock on any given trading day.

Related Terms

collar, option class, closing transaction, cash settlement