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  • Execute Period
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  • Canceled Signal
  • Alternative Options
  • Stop-Loss System
  • Signal's Publish

• FAQs
  • Fast Answers
  • Selling Short Calls
  • Selling Short Puts
  • Why sell Options

About Stop-Loss Strategy

Do you always issue a stop-loss for each new signal?

In some cases we may not state a "Suggested Stop-Loss" price when a new signal is generated by the following reasons:

1. When our signals are based on strong term indicators and we do not want our stop-loss to be hit as a result of a correction;
2. In trading naked options, the time factor is on our side and out trading system indicate side-way trading and we prefer remain in position;
3. We prefer waiting for options expiration with expectation of them to expire worthless when we may pocket 100% of premium.

Can a new stop-loss be set for previously issued signal?

Yes, a new stop loss could be set after a signal was generated and after an option position was initiated. The market is in constant change and what was bullish yesterday could become bearish today and opposite. If our trading system indicates changes in the market sentiment and we consider that it is better to close an options position in order to cut losses or protect profit we may set a new stop-loss (if it was not set when a signal was generated) or change an existing one.

When do you issue a stop-loss?

Mostly, a stop-loss is issued to protect a gain or to limit a loss. In both cases we do it when our trading system indicates possibility of changes n the market sentiment and we consider that it is better to go in cash position.

At the same time, there could be a situation when when we expect just a short correction and we see the possibility to close the current position with profit and re-enter it again in a short period of time at better entry price with expectation for an additional profit.

What happens when your stop-loss is hit?

In case when our "Suggested stop-loss" price is hit, we will close out our short options position at the stop-loss price. As a rule, we wait for a confirmation email from the online brokers who autotrade our signals and then send an email alert out that our short options position was closed at our stop-loss level.