Comment on Stop Loss orders - Limit/Market

Nithin Kamath commented on 07 Nov 2013, 03:09 AM

For your long position:
1. Place a SL-M buy at 100
2. Place a Limit selling order at 101
3. Place a SL-M sell at 99( for limiting loss if executed).

The issue with this is if your SL-M sell at 99 hits first, you will have a naked short position. So the best way to do this would be to first execute your entry order(point 1) and then place orders 2 and 3 above.

Similarly for the short position.

1. Sl-M SElling at 90
2. Limit buying order at 89
3. SL-M buying at 91(to cover your loss)

But again the issue would be the same like above.

Hope this clarifies.

View the full comment thread »