P&L Action: Stop Loss

Updated: August 16, 20252 min read

1. Overview

The Stop Loss is one of the central Profit & Loss Actions in OptionsApp. It allows you to place an automatic closing order.
The Stop Loss can be defined at the Leg, group, or Combo level.

2. Defining the Stop Loss

Different calculation methods can be selected to determine the Stop Loss price:

2.1 Percentage of Premium

The Stop Loss is defined as a percentage of the execution price.
Example: If you set a 100% Stop Loss on a credit trade, the Stop Loss value is set to twice the premium collected.

2.2 Fixed Loss

An absolute loss amount is specified, e.g., $2.00.
The order is set so that when this threshold is reached, a loss of approximately $2.00 occurs.
Important note: There is no guarantee that the loss will be limited to exactly this amount. Slippage can cause the actual loss to be higher.

3. Trigger Conditions

The Stop Loss can be triggered in different ways. It's important to keep in mind that in all cases it's always a Market Order. The trigger activation is controlled via the "Trigger Type" selection:

Single Bid: The Market Order is triggered as soon as the bid price is reached once.
Double Bid: The Market Order is only triggered when the bid price is reached twice in a row.
Mid Price: The Market Order is triggered when the mid price reaches the stop level.

4. Stop Loss Extensions

4.1 Use REL Order

Additionally, a stop order can be executed as a REL Order (Relative Order).
A REL Order is a dynamic limit order that adjusts with a defined offset. This can reduce slippage risk since execution occurs closer to the market price.

Advantage: better control over execution during rapid price movements.
Disadvantage: no guarantee that the order will actually be executed if the price moves too quickly or the limit is exceeded.

=> You can find a detailed explanation in the article: What is a REL Order?
=> There is also a video available on REL Orders.

4.2 Stop Loss Adjustment

The Stop Loss can be dynamically adjusted to changing market conditions (e.g., automatic trailing on price changes).

=> See the separate article for this: Stop Loss Adjustment

5. Stop Loss Transmission

The Stop Loss is fundamentally held directly with the broker. Even if OptionsApp is closed after setting the stop, the stop remains active and will be automatically executed by the broker when the threshold is reached.

If higher slippage values occur on a Stop Loss, this can be due to rapid market movements, wide spreads, or delays in execution by the broker or exchange. OptionsApp has no influence on what the actual closing price will be.