Buy to Open means that you are purchasing a call (An option that grants the right to buy a given stock at a given price (the strike price) during a given period of time. The call holder profits if the market price rises higher than the strike price. ) or a put ( An option that grants the right to sell a given stock at a given price (the strike price) during a given period of time. The put holder profits if the market price goes below the strike price. ) . When you buy to open, you are opening a new long position in the option. You own the option, and you can control whether you exercise it or not. You pay the premium for the option.

Sell to Open means that you are writing a call or a put. When you sell to open, you are opening a new short position in the option. As the writer of an option, you are entitled to the premium that the buyer paid for the option. You are obligated to buy or sell shares of the underlying security if it is exercised.