How to place a Stop Lost order for a credit spread

F&O
1

hi all ,
How to place a stop loss in a credit spread to reduce . Should I rely on the underlying or on the option premium of the short leg ?

If I have to rely on the underlying , how do i place the SL order please ?

Thanks,

2

If you want to place Stoploss on Options, you will have to do so on Option itself, not on underlying.

If if want to place Stoploss based on Underlying, you can create an Alert on Sentinel for Underlying Price, whenever this alert is triggered you will get notified on Kite and via Email, after that you can exit your Option position manually.

3

Thanks … Incase I want to reduce the losses in the spread , how do I then go about doing it. Only manual SL or we need to base it on the calculations of the premia of the spreads …

4

This will depend on your analysis, if you want to exit after underlying reaches certain point then you can use Sentinel to create alert on underlying, once it is triggered you will have to manually exit your position. If you want to exit based on Option premium then you can use Stoploss orders or GTT Order for overnight positions and set Stoploss based on Option premium. You can learn about Stoploss orders here and GTT Orders here.