How to calculate a trailing stop for intraday options trading?

[Erick Gomez]

Hi

I have been doing a research and I am using a trailing stop with a fix percentage. Dou you guys know a method off setting the intraday stop loss based on volatility or expected market move or using ATR?

 

[stepandfetchit]

Erick:

Unclear what your expectation is for a Stop on an Option! Unless the option contract has tight bid/ask spread and good volume, a Stop may take you to the cleaners.

If you use TOS as your trading platform, post the question in the "thinkScript Lounge" of the "Chat Rooms". TOS supports triggering a trade based on a Study, which "may" allow you the flexibility you seek. (The idea, is the study would monitor the market conditions in real-time, and provide a trade signal, which could emulate the action you seek)-- I have not used this myself.

 

[xandman]

Hi

I have been doing a research and I am using a trailing stop with a fix percentage. Dou you guys know a method off setting the intraday stop loss based on volatility or expected market move or using ATR?

I think you answered your question by stating the methods: volatility, expected move, and ATR. It is just a matter of selecting a parameter to the method you choose. Some people use backtests. Some are more forward looking and make less rigid forecasts.