Options behave very differently than traditional equities.

For all naked option positions, I personally do not like to keep stoploss based on option price...rather I'd base it on the spot prices.

For example consider I have bought 8000 CE at 34, when Nifty Spot is at 7990. My stop loss for this would be based on Nifty spot. If I have a 1% SL on Nifty Spot, i.e about 80 points below my entry (7910)..I'd hold on to my option position as long as Nifty Spot is above my SL i.e 7910.

At 7910 or below, I'd take a call to exit the trade (or whatever action) even though the option is trading at a much lower price than my entry.

--------------------------------------------------------------

You can use Option Greeks to estimate the **approximate** value of the underlying at which you may want to keep SL for options. Here are some calculations..

Assume:

Nifty Spot = 7990

Strike = 8000

Option Type = CE

Option Delta = 0.4

Option Price = 34

Lot Size = 50

Qty Traded = 1

Premium Paid = Rs.1700/-

Desired SL in Rupees = Rs.1000/-, this mean for the SL to be trigerred, the Option Price has to drop to Rs.21 from Rs.34...a drop of 13 points ( Rs.13 * 50 = 1050)

Now the question is, if the Option Price has to drop to Rs.21, what should be the corresponding value of he underlying?

Look at the Delta = 0.4

This means the option move 0.4 points for every 1 point movement in the underlying. Going by this a drop of 7 points on Option Price will happen when the underlying falls by at least 33 points.

This means 7990 - 33 = 7957.

Hence, 7957 will be corresponding value of spot if you wish to keep Rs.1000 as your SL (based on Option price).

Hope this makes sense.

Also do remember, there are other variables at play (Vega, gamma, theta), hence I've used the word "approximate'.