Stop Losses with options
Summary of User Inquiry and Solutions:
- Main Problem: The user wants to know if they need to place two separate orders to set a stop loss for an option that triggers if the option falls by 10%, or if it can be done in one order, and whether this is referred to as a bracket order.
- Solution: The user can utilize conditional orders to close the options position if the underlying security drops by 10%. This allows for setting order triggers based on price movements.
- Steps to Place a Conditional Order:
- On the website: Navigate to “Accounts & Trade,” select “Trade,” choose the account, and then select “Conditional” in the trade box.
- Using Active Trader Pro (ATP): Click on “Trade & Orders,” and select “Conditional Orders” from the dropdown menu.
Here’s the full thread
When you buy and option and want to have a stop loss that will kick you out if the option falls 10 percent, do you have to do 2 separate orders, or can you do it in just one. Is this called a bracket order? Thanks
Thanks for reaching out to us regarding this, @Thylastgamer.
If you would like to close the options position if the underlying security falls 10%, you may enter a conditional orders. Conditional orders allow you to set order triggers for stocks and single-leg options based on the price movement of stocks or indices. For example, you could set a Contingent order with Condition A as “the security drops by a %” and Condition B as a market or limit order. Conditional orders are available through our website and Active Trader Pro (ATP). Please note that conditional orders are currently not available for multi-leg options strategies.
On our website, follow the steps below to place a conditional order.
1. Click “Accounts & Trade” in the top left corner and select “Trade” in the dropdown.
2. Select the appropriate account.
3. In the first “Trade” box, navigate to “Conditional.”
If you’d like to use ATP, please follow these steps.
1. Click the “Trade & Orders” tab at the top.
2. Select “Conditional Orders” in the dropdown.
Trading FAQs: Order Types: https://www.fidelity.com/trading/faqs-order-types
Let me know if you have additional questions.
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