Can you please explain how you place trailing stop losses once a play moves into the money, both for stocks and for options?

When a stock runs into the money we will move up our stop losses to protect our gains the best we can. When it first starts to move up and makes a good move off of the support or resistance level that we are playing, we move the stop up to just below that point. That usually puts our stop near our buy point; below it by a dollar or so (depending upon the price of the stock) just so we don’t get taken out on an intraday dip below that level. After it starts to log greater gains, we move it up, again looking for another level of potential support such as the 18 day MVA. We always try to find some point that looks like plausible support that we can move the stop up under if we intend to hang onto the stock and let gains build but want to also avoid a problem if the stock does start to fail for some reason.

When the market is choppy and undecided as it is now, if we get far into the money and are close to our target, we will go ahead and move it up to protect those gains even if support is not really there. If a stock is making a hard run up and comes close to our target but does not reach it, we move it up to preserve, particularly if it is showing signs of wearing out on the move. Remember, our target is set at a point of resistance or where we have found stocks to usually run out of steam on the upside. In a choppy market, if we are close we will protect positions as opposed to having the stock run out of gas and turn on us.