This is an example of a simple order form to enter any option orders.
Option Symbol Field
In the option symbol field, you can find the option chain that you are interested in and select the particular option that you would like to trade. You can do so by clicking on “Find Chain”. When this is done, a new window will pop up and you can begin selecting the particular option that you’d like to trade.
With regards to action, you can select the type of transactions that you would like to make. You can select the “Buy To Open”, “Buy To Close”, “Sell To Open” and “Sell to close”. With regards to trading, when a position is initiated, whether long or short, it is an “open” position. Following which, the position would have to be “closed” by the trader.
When a trader “buy to open”, he would have to “sell to close” thereafter.
When a trade “sell to open”, he would have to “buy to open” thereafter.
In the quantity field, the trader should type the number of option contracts that he would like to buy or sell.
Subsequently, the trader will have to make one of 4 selections, Market, Limit $, Stop $, Stop Limit.
“Market” refers to an order that is executed at the prevailing market price. This is known as a market order.
“Limit $” refers to an order to buy or sell at a specific price or better. Order execution is not guaranteed when this is selected. This is known as a limit order.
“Stop $” refers to a contingency order that is executed only when a certain price level is reached. When a certain price level is reached, the stop order becomes a market order and is executed at the prevailing market price.
“Stop Limit” refers to a contingency order that is executed when a certain price level is reached. When that price level is reached, the order becomes a limit order and is executed at a specific price or better.
Do take note that this is just an example of how an order interface looks like. Different online brokers may use a slightly different interface. However, the principles of ordering remain similar.