Take Profit and Stop Loss Configuration in Chainless
Chainless includes powerful risk management features that allow you to set automated Take Profit (TP) and Stop Loss (SL) orders for your options positions. This guide covers everything you need to know about configuring and managing these risk management tools.
What are Take Profit and Stop Loss?
Take Profit (TP): An automated order that closes your position when the underlying asset reaches a favorable price, locking in your profits.
Stop Loss (SL): An automated order that closes your position when the underlying asset reaches an unfavorable price, limiting your losses.
Important: TP and SL triggers are based on the underlying stock price, not the option price. This means your risk management orders will trigger when the underlying asset (e.g., AAPL stock) reaches your specified price levels, regardless of how the option's premium changes.
Accessing TP/SL Configuration
From the Portfolio Table
- Locate Your Position: Find the position you want to configure in the Sell to Close section
- Click the Gear Icon: Click the ⚙️ TP/SL button in the rightmost column
- Configure Settings: The risk management dialog will open
TP/SL Configuration Dialog
Take Profit Section
Enable Take Profit:
- Check the "Enable" checkbox to activate TP
- Uncheck to disable (fields will be greyed out but values preserved)
TP Configuration:
- Price: Set the underlying stock price at which to trigger the TP order (not the option premium)
- Quantity: Number of contracts to close (defaults to full position)
- Order Type: Choose Mkt, Bid, Ask, or Mid for the closing order
Stop Loss Section
Enable Stop Loss:
- Check the "Enable" checkbox to activate SL
- Uncheck to disable (fields will be greyed out but values preserved)
SL Configuration:
- Price: Set the underlying stock price at which to trigger the SL order (not the option premium)
- Quantity: Number of contracts to close (defaults to full position)
- Order Type: Choose Mkt, Bid, Ask, or Mid for the closing order
Automatic Suggestions
Chainless provides suggestions based on your option type and current underlying price:
For Call Options
- Take Profit: +10% above current underlying stock price
- Stop Loss: -5% below current underlying stock price
For Put Options
- Take Profit: -10% below current underlying stock price
- Stop Loss: +5% above current underlying stock price
Using Suggestions
- Auto-Population: When you open the dialog, fields are pre-filled with suggested values
- Customize: Adjust the suggested prices to match your risk tolerance
- Quick Start: Use suggestions as a starting point, then fine-tune
Order Types Explained
Market Orders (Mkt)
- Fastest Execution: Orders execute immediately at current market price
- Best for: When you want guaranteed execution
- Consideration: May get filled at less favorable prices during volatile periods
Bid/Ask Orders
- Bid Orders: Close at the current bid price (what buyers are willing to pay)
- Ask Orders: Close at the current ask price (what sellers are asking)
- Best for: When you want to control the exact price
Mid Orders
- Mid-Price: Orders execute at the midpoint between bid and ask
- Best for: Balancing execution speed with price control
- Consideration: May not execute if market moves away from mid-price
Monitoring TP/SL Levels
In the Portfolio Table
Take Profit Column: Shows your Take Profit trigger level
Stop Loss Column: Shows your Stop Loss trigger level
Underlying Column: Current underlying stock price for reference
Visual Indicators
- Green TP Level: Take Profit price (above current price for calls, below for puts)
- Red SL Level: Stop Loss price (below current price for calls, above for puts)
- Real-time Updates: All prices update continuously during market hours
Order Management
Viewing TP/SL Orders
In the Orders Section:
- TP/SL orders appear as regular orders with "Rule" information
- Shows trigger details like "TP @ 160.05" or "SL @ 158.68"
- Displays trigger time when orders are activated
Modifying TP/SL Rules
- Click Gear Icon: Reopen the configuration dialog
- Adjust Settings: Change prices, quantities, or order types
- Save Changes: New settings replace the previous configuration
- Automatic Updates: Orders are updated automatically
Canceling TP/SL Orders
Individual Cancellation:
- Go to Orders section
- Click "Cancel Order" for the specific TP/SL order
Disable Rules:
- Open TP/SL configuration dialog
- Uncheck "Enable" for TP or SL
- Rules are disabled but can be re-enabled later
Risk Management
Position Sizing:
- Set TP/SL quantities based on your risk tolerance
- Consider partial closes (e.g., close 50% at TP, let rest run)
- Never risk more than you can afford to lose
Regular Review:
- Monitor TP/SL levels as underlying price changes
- Adjust levels based on new market information
- Disable rules when market conditions change significantly
Troubleshooting
TP/SL Not Triggering
- Check Market Hours: TP/SL only work during market hours
- Verify Price Levels: Ensure trigger prices are realistic
- Order Type Issues: Market orders may not execute if spreads are wide
Orders Not Appearing
- Connection Status: Ensure connection to IBKR is active
- Order Placement: Check that orders were successfully placed
- Refresh Orders: Orders section updates automatically
Unexpected Executions
- Gap Movements: Large overnight gaps may trigger orders at unexpected prices
- Market Volatility: Fast-moving markets may cause slippage
- Order Type: Market orders execute at best available price
Tips
Partial Position Management
- Set TP for 50% of position, let remaining 50% run
- Use different TP levels for different portions
- Scale out of positions gradually
Integration with Manual Trading
- TP/SL work alongside manual position management
- You can manually close positions even with active TP/SL rules
- Manual closes automatically disable corresponding TP/SL rules
Start with the suggested levels, customize based on your strategy, and regularly review your risk management settings to optimize your trading performance.