Stop Loss on CO order for Options Writing

F&O
1

Is the SL trigger price for CO orders in options is 20% of the Buy/Sell price (which is same as in cash segment)?

The problem is in the pursuit of lower margins (in any case this shall all go away but until it is available) we might stand to loose a lot in options writing with CO orders especially on expiry day

Should this 20% not be higher for the options segment?

Or is it the expectation to monitor the price continously and adjust the SL (even then it might not help for spike with Delta & theeta) and to add to it when BO orders ( atleast trailing SL could come to the rescue) are also not made available?

2

Yes, max 20% difference rule applies when using CO for Options as well.

3

Also one more question do we have to exit all the quantity of CO order and cannot be done partially is it?

So what to do if want exit in parts - if we need to then CO order cannot be used is it?

4

Partial exit of Cover Order isn’t possible. When you want to exit, you will have to exit all the quantity.

5

@ShubhS9 - one more question on the same if I place a target limit order and it gets executed - then how to exit the CO order which is no longer valid.

Or the only way out of the CO order is raising the stoploss even for target.

Why can’t we cancel the SL leg of the CO order once we achieve target with another limit order.

6

If you place Target Limit order it won’t square-off your CO position but initiate fresh position against your CO trade.

If your CO position has hit your desired target price, you can simply exit the trade from Orders tab.