Thread by @SubhadipNandy16

Ok, time for some analysis. 65% said they will wait for the SL as per eod close. 35% said they would sqoff intraday.
Who is correct and who is wrong ?

https://twitter.com/SubhadipNandy16/status/1428016480277331978

Those who said intraday, say Reliance broke 2078 and you sqoff the trade, then it immediately jumps to 2085. What do you do, re enter ? then again it breaks 2078, what do you do, exit ?

This can go on for quite some time

The logic of the intraday sqoff comes from this idea that if Reliance falls say another 10-20% from 2078 by the time market closes, you are facing a bigger loss.
This idea is correct in futures/cash, but not in options

Even a naked bought position is also a risk defined / limited risk trade, you can only lose upto the premium paid. Here, the trade was a spread, so the loss is defined and even lower

From a level of 2100, if you are attempting 2200 as target, you need to give the stock time and space to make that move. Intraday moves are at best random, so basing you positional SL on intraday movement is a bad strategy

For the 65% who said EOD basis closing stop, congrats you are on the right track.
For my positional option strategies, the stops are always based on EOD closing and not intraday

So the trade on Reliance which I gave, the SL was obviously by closing. In this pic, what I showed was that Reliance never closed on eod closing basis below 2078

https://twitter.com/SubhadipNandy16/status/1427152583034957826

Seeing a lot of chatter on fintwit regarding stops on EOD closes, weekly closes or even monthly closes. General chatter is that these cannot be done as by the time the market closes as per these closings, the stock may slide down further.

My view : all these stop logics are valid

In an options strategy, if you are risk defined, does not matter even if you close below 20% of your stop price. You will have the same loss as initially estimated on your strategy.

And , a naked option buy is also a RISK DEFINED

What I find even more funny is that none mentions (as I guess they have no idea) that there is a fantastic method to take care of weekly or monthly closings😀
It's not a simple add x% filter, but a more robust method of doing so.

I understood the method by reading through the works of past and current greats of technical analysis. Won't hand it over in a platter, so go read whatever you can and see if you can work out the method.

We are currently positioned bullish on NIFTY in our handholding group. The strategy is risk defined with a stoploss of 17 points. So even if Nifty gaps down 200 points and falls another 300 points, the max we lose is 17 points. 😀
We intend to hold till closing today