Sell to Open

The order is assigned with the anticipation that the security value will decrease as you get the sale price when the contracts are sold.

Unlike investment assets examples or alternative finance investment bonds, ownership is linked to the company.

It works on bets made on price changes within a given time phase. One can use a call or put where the holder decides to exercise the preference.

If the holder decides to exercise their option and buy the security at the strike rate, you are obliged to sell at that price regardless of the security's current price. 

Some investors assume the order is used to take a short position on underlying security, but it is used for options contracts, where you can make money if the options contracts go down in value.

Put contact values go down when the security prices increase, so if you write put, you go long on the underlying security. 

While writing such investing solutions, you give the person who buys the contracts the right to buy the relevant security at the agreed rate.

It comes with a living space and can expire after a specified date. They are fungible, where the same person is not involved in buying and selling.