Placing a Stop-Loss ( to Lock In profits ) on a Regular Long .......

Call or Put trade/position

EXAMPLE:

If I'm Long a Call , and am in the Plus by $10,000 ..... can i put a Stop-Loss on the trade to Automatically get me out of the trade, if my $10,000 profit on the trade, turns to ( drops ) to say $8,000 profit ( so I've lost $2,000 on the trade ) ?

Can you place a stop-loss directly on the Options trade itself , or do you have to Monitor the trade Daily , and get out of the trade manually at a $2,000 loss ?

Thanks for the help, much appreciated

 

Yes, you can put stop losses on or you could simply spread the trade to a higher strike and lock in some gains, etc, etc...

 

I'd do this since stop losses are vulnerable to gap risk.
Yeah, use a spread or otherwise hedge so that you can at most lose 2000$.
You will lose some short term Delta, but this allows the trade to recover value if it goes below your stop.

 

You never lock in profits if you have not closed.

 

I think my brokerage will place a stop loss essentially as a market order. Buy at ask and sell at bid. I never use stop loss on my options so I am not 100% sure.