Directional Loss % of Premium
Setting key
directional_loss_pct_of_premium
Default
50%
What it does
Stop loss for directional positions, expressed as a percentage of the premium paid (debit outlay). If the position has lost 50% of the premium paid, it is closed. Complements the delta take-profit on the winning side.
When to change it
Tighten to 30-40% if you want smaller losses on directional misses. The 50% default follows tastytrade's general guidance for debit spread stop losses.
Safe range
25% (very tight) to 75% (permissive, hold through larger drawdowns).
Example
Bull call spread entered for $1.50 debit. 50% stop = close if position value drops to $0.75 or less.