Hi all! Please help me understand using percentages in options orders. Here's mine example:
What I am structuring here is buying puts with an OCO to take profit and stop loss. the first OCO is take profit if there's a 50% decrease, and the stop loss is if there's a 30% increase. Just want to confirm that this is a percentage on the price of the put (currently at 0.72) and if the underlying decreases the equivalent of the price increasing 50% (expected price is 3.68) and it would be at this point 0.72*1.5=1.08, and by the same logic the stop loss requires an increase in the underlying price to the equivalent of a 30% decrease in the price (expected price 5.19) and the price of the option being 0.504. Is my understanding correct?
What I am structuring here is buying puts with an OCO to take profit and stop loss. the first OCO is take profit if there's a 50% decrease, and the stop loss is if there's a 30% increase. Just want to confirm that this is a percentage on the price of the put (currently at 0.72) and if the underlying decreases the equivalent of the price increasing 50% (expected price is 3.68) and it would be at this point 0.72*1.5=1.08, and by the same logic the stop loss requires an increase in the underlying price to the equivalent of a 30% decrease in the price (expected price 5.19) and the price of the option being 0.504. Is my understanding correct?
