What Is The Full Form Of BTO In Banking?
BTO full form in banking is Buy to Open. For those who don’t know, you see, this term is used a lot in the stock market, especially when talking about buying options. What’s the deal with it though? When a trader buys a share or an options contract to start a new long position, this is what it means. It’s more like putting money on whether a stock will go up or down. If you buy a call option, you want the price to go up, which is called a positive move, you know?
How Does Buying to Open Work?
In short, this is how it works: Traders go to their brokerage site and choose the stock or option contract they wish to buy. They will choose how many they want, set any conditions they want, such as a maximum price, and that’s it! Simple! Someone might use a Buy to Open order to get some call options if they think the price of ABC Inc. is about to go through the roof. They will decide how many contracts to buy, what the strike price will be, and when the contracts will finish.
Differences from Other Order Types:
Let’s be clear: That’s not the same thing as Sell to Close, which is used to get out of a trade you’re already in. Also, it’s not the same as Sell to Open, which is all about being short, you know?