Let’s say we are short a 920straddle with a stop loss on each leg at 20%, and “Square off: Partial” selected. A large market move in one direction will lead to one leg’s SL being hit. In this scenario, we will only exit that leg and continue to hold the position of the other leg. For example – if my call and put entry prices were both Rs 100, then my SL for each leg is Rs 120. Most likely the call SL will get hit first if the market goes up first. In this scenario, the put will continue to be in the market, with its stop-loss unchanged at Rs 120. A similar scenario unfolds if the market goes down first, in which case your put SL will be hit while the call stays in the market.

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Trail Stop Loss to Break-Even Price when Backtesting

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Trail Stop Loss to Break-Even Price when Backtesting

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