Placing a Stop-Loss ( to Lock In profits ) on a Regular Long .......

[md2324]

Call or Put trade/position

EXAMPLE:

If I'm Long a Call , and am in the Plus by $10,000 ..... can i put a Stop-Loss on the trade to Automatically get me out of the trade, if my $10,000 profit on the trade, turns to ( drops ) to say $8,000 profit ( so I've lost $2,000 on the trade ) ?

Can you place a stop-loss directly on the Options trade itself , or do you have to Monitor the trade Daily , and get out of the trade manually at a $2,000 loss ?

Thanks for the help, much appreciated

 

[W.J. Feathermaker III]

Yes, you can put stop losses on or you could simply spread the trade to a higher strike and lock in some gains, etc, etc...

 

[CyJackX]

Yes, you can put stop losses on or you could simply spread the trade to a higher strike and lock in some gains, etc, etc...

I'd do this since stop losses are vulnerable to gap risk.
Yeah, use a spread or otherwise hedge so that you can at most lose 2000$.
You will lose some short term Delta, but this allows the trade to recover value if it goes below your stop.

 

[prc117f]

You never lock in profits if you have not closed.

 

[ironchef]

I think my brokerage will place a stop loss essentially as a market order. Buy at ask and sell at bid. I never use stop loss on my options so I am not 100% sure.