Since exchange has disabled sl-m orders for options, how can one execute (entry) if the strategy is built on price crossing the high/low of previous candle ?
Use SL-L with limit price being higher than your trigger price.
But is there a risk of price being skipped without the order getting fulfilled ? What are the odds of this happening ? @siva
Yes, this risk is always there if the price moves beyond your trigger, the order will be placed but wont trigger because price has already moved above from the zone. That is why you put higher value in the price.
If my trigger is 100, my buy will be placed at 105, I will take that extra 5 point loss to be sure I exit.
Depending on the liquidity in the instrument.
Whats the difference between price and trigger price ? If an option is trading at 100 currently, lets say I want to sell at 95, what do I enter in both the fields ?
Ideally you want to be able to do this. But since you are worried this price might not have buyers.
So I’d put the price to be cheaper than 95 like 90 or 93, Whatever is the extra points you are ready to give up.
This acts as a market order for me because, when the 95 price is trigger my 90 order will be placed and whatever is the closest bid for 90 that will be matched instantly like a market order.
Lets say I want to sell this at 420, what do I enter price and trigger price ? Whats the difference between both here ?
Thanks for the reply.
So If i were looking at this, I can see there is a pretty nice liquidity with a gap of 1-2 points between BID and OFFER.
So I’d put trigger at 420, price 2 points lower at 418.
When the trigger price(420) is reached, the limit order(418) is placed in the order book.
Why not keep both at 420 ? How does 418 make a difference ?
You can keep the price at 420 as well, it will trigger as long as the movement in the option is quite linear. I keep 2 points lower to reduce my risk if my limit order does not get executed.
I dont get the difference between price and trigger price. Why enter 2 prices ?