Trailing Stop-loss Order (TSL) with Book Profit

For example: If one have an existing buy position/holding with market price of Rs 100 per share and wishes to place a stop loss sell order with trail option for Rs 97 per share, with a stop loss trigger price of Rs 98.

Rising price :When the market price of the stock moves to Rs 101, the stop loss also gets revised to Rs 98 and the stop loss trigger price becomes Rs 99. This stop loss price will continue to move up when the LTP of the stock keeps on increasing.

Falling Price : When the market price of the stock moves to Rs 99, the stop loss does not get affected and stays at Rs 97. This stop loss price would not change until the market price does not move over market price of Rs 100.

Stop Loss Trigger : When the market price for the stock reaches Rs 98, which is the trigger price for the stop loss order, the stop loss order gets executed at the market price between Rs 98 and Rs 97.

Stop Loss Trigger after a price rise :When the market price of the stock moves to Rs 105, the stop loss also gets revised to Rs 102 and the stop loss trigger price becomes Rs 103. Now if the price fall to Rs.103, which is the trigger price for the stop loss order, the stop loss order gets executed at the market price between Rs 103 and Rs 102.

Book Profit option is also available for TSL orders, when the upper range for the order is also defined. In the above example, if you want to book a profit at the market value of Rs 110 per share, then you can place the TSL order with a book profit sell price of Rs 110. As soon as the market price of the share reaches Rs 110, the book profit order is triggered.