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.
collar, option class, closing transaction, cash settlement
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