For Traders using Stop Loss in Options >>>>


How do you calculate the SL in case of Nifty Options. Is it based on the number of points that the market will move (like 50 points up or down) or is it based on the percent change from the price level you bought the option at, (Like SL = 95 if you bought it a CE for 100)?

Also, do you prefer to intraday options or hold them for a few days? (and why)

Thanks !

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A crude method would be to determine the stop loss points in Nifty spot, multiply it with delta of the option and then

  • Subtract the resultant value from the option ltp, if you are long
  • Add the resultant value to the option ltp, if you are short

Prefer to hold positional long options based on Nifty trend. A trend follower makes money when the underlying trends. It is important to ride the trend as long as it last to get max rewards which offsets the lower accuracy of trend following systems. Hence the idea to hold long options overnight.

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what about trailing stop loss , its same way what it is advised above with incresing with same number of points in case of buying option, thanks