Stop loss and premium

General
1

Hi,
Does the stop loss of $150 includes the premium collected of $100?

Course Name: Advanced Options Volatility Trading: Strategies and Risk Management, Section No: 27, Unit No: 1, Unit type: WaterMarkVideo

2

Hi Red Red,

Loss = $250 (buyback cost) – $100 (collected premium) = $150.

Yes, the stop-loss value includes the premium collected. You’re tracking how much it would cost to close the position, and comparing that to your initial credit.

Thanks,
Ajay