Comment on Stop Loss orders - Limit/Market

Nithin Kamath commented on 17 Jun 2014, 10:02 AM

AG,

If you are buying out OTM like you have mentioned, most of the premium is the time value as there is no intrinsic value to the option. So it is very tricky to put a SL on the premium based on how the price of underlying moves. There could be times when market falls but call premium doesn’t because the volatility of the market would have increased. So you will have to keep a SL on the premium itself based on the risk you are willing to take.

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