While trading options …options buying I preset My stoploss before a trade is executed
for example I enter at market price and set stoploss as 5 rupees so if i enter at 340 the order should exit at 335 after hitting stoploss or with less than one rupees slippage …but mostly stoploss jumps and order exits beyond 5rupees with jump of 2 rupees to sometimes 10 rupees …that is order will exit at 333 or 330 or 326
As number of trades are more these slippages in total at the end of day can be a little concern
Is this a natural phenomenon of the market order or there is some other issue
Anybody has any solution to minimize the slippage to as close to set stoploss as possible with market order
1, Trade with liquid options. Liquidity will reduce slippage.
2. You can try stop loss limit orders. The caveat is that your order may not be executed if there is no order placed on the other side in your stop trigger price - limit price band.
Market orders are executed at the next available best price. So the slippage could be large if the bid - ask spread of your option is large and not to your liking.
Hmm-too tight stop loss especially in today’s volatile option charts is as good as no stop loss.
You might want to be very selective of your trade entry- example- entering only when there’s momentum- so you can afford a small SL or you can keep a SL of 20 instead of 5.
Personally I have seen the ltp fall way below my entry price from minute 1.
I hate to admit but I take 1 trade at say 340 and then add another at 320 (hypothetical) and then place an SL based on ‘max loss per trade’ and ‘candlestick stop’
This is not a recommendation but I am forced to do this as 1 minute volatility is too high and in the last weeks- scalping has been tough.