Hello
There are multiple ways we can calculate stop loss in Options trading, % based or based on underlying stock/future price and recommended is double trade strategy.
Now in Zerodha if am trading in bank nifty weekly options, currently I use % based stop loss but isnt working so well for me.
Does anyone know how can I put Stop Loss on BNF options based on bank nifty monthly futures level?
So if I have entered 24800PE at 200 with bnf future at 24730, currently stop loss price I put is 175.
I want to put stop loss based on bank nifty future level reaches 24650.
Is it possible? If no, any recommendations to improve my stop loss strategy please.
Option prices are not decided on futures but on the base price of the Index. The easy way to put stoploss is to measure corresponding value of Index level with option price. I have enclosed a link for you to calculate Option price corresponding to price movement of Index… hope this helps
Option fair value calculator
best regards
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Thanks Suresh.
How do we calculate Rate of Interest in above calculator, in the tutorial video they simply assumed ROI to be 10%.
leave rate of interest as it is, because it is usually market rates…but you can take volatility figures from NSE website…That Volatility figure is important to calculate right option prices…
Great, thanks Suresh for confirmation.
This looks very helpful and promising. Will start implementing it next week.
@SureshG Thank you, very useful in knowing payoffs.
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