You can either buy or sell something and you can either open or close something. That something being an equity, index or forex position (I will refer to it as an instrument).
You can also sell something that you don't have and buy it back later for less money !
- Buy to Open means that I have purchased an instrument and opened a risk position.
- Sell to Close means that the instrument that I had bought earlier I sold for a profit (or a loss) !
- Sell to Open means that I dont have the instrument but I have sold it and opened a risk position.
- Buy to Close means that I sold the instrument earlier and now have bought it back.