Comment on Stop Loss orders - Limit/Market

ethicaldeal commented on 08 Nov 2013, 03:07 PM

Dear Zerodha
You mentioned “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. ”

In the above explanation, I would go and execute the Buy order at 100 (Per step 1)
Then you mentioned I go ahead and place Step 2, and then Step 3

But if I place a Sell -Limit order then it would be considered the “pair” exit order and hence no extra “margin” money would be required (for futures)
But, somewhere in the Z-Connect blog I read that in order to place the SL-M sell I need to have margin money equal to 99(in this case), is this true ?

If this is true (and considering I only have 200 rupees in my trading account) then would I be able to put the short sell (SL-M Sell)??

Kindly explain with respect to margin money and also what happens if I apply this strategy to stocks (equity)?

Thanks in advance

View the full comment thread »