Trailing Stops in Depth
A trailing stop aims to protect gains by following the best profit a position has seen and triggering a close if too much of that profit is given back. This article covers the settings, then goes deep on the part that surprises people: how the trail measures profit, and what happens to that measurement when part of a trade closes.
From October 20
Starting at the opening bell on Tuesday, October 20, 2026 (9:30 a.m. Eastern), a trailing stop follows only the contracts the bot is still managing. Banked profit and leftover longs held separately for sale do not count toward the trail. When the bot records a reduction of the managed position, the trail starts over for the contracts that remain. This applies to every bot with Trailing Stops enabled, on every broker, and your settings stay exactly as you entered them.
| Through October 19 | From October 20 | |
|---|---|---|
| What the trail measures | The overall trade, including profit banked by contracts that have closed | Only the contracts the bot is still managing, excluding leftover longs held separately for sale |
| Best profit the trail follows | The whole trade's best, kept for the life of the trade | The managed position's best since its last change |
| When part of the trade closes | The trail carries on with the same best profit and stop-out level | The trail starts over when the bot records the reduction, and re-arms when the remaining position's own profit reaches or exceeds your Profit Trigger |
| Profit shown on the dashboard and in reports | The whole trade | The whole trade, unchanged |
Trades already open that morning
For a trade that is open at the opening bell on October 20, what happens depends on whether the position is still untouched:
- No part has closed and every original leg is still active at its original quantity. The trade keeps its recorded best profit. An armed trail stays armed with the same stop-out level.
- Part has closed, or an original leg or its quantity has changed. The old whole-trade peak is not carried into the new trail. It starts over for the managed position and re-arms when that position's own profit reaches or exceeds your Profit Trigger.
If you run multi-day trades that have been partly closed, check the trailing stop line on the Trading Dashboard that morning. A trail that was armed on overall trade profit will show its enable price again until the remaining position earns it back. If its profit is already at or above the trigger, the trail can re-arm on the next check with complete prices.
The rest of this article describes trailing stops as they work from October 20.
The three settings
Trailing stops are configured in the Trade Stop section of the bot editor:
- Trail Calculated By picks the unit. Percentage measures profit against the magnitude of the managed legs' net entry credit or debit. Option Dollars measures profit in option prices per spread unit, where $1.00 equals $100 of real profit per unit.
- Profit Trigger for Trailing Stop arms the trail. Once profit reaches or exceeds this level, the trailing stop is active and starts protecting gains.
- Trailing Stop Allowance is how much profit the trade may give back from its best level before it is stopped out.
A quick worked example with percentages: a 30 percent Profit Trigger and a 10 percent Allowance arm the trail once profit reaches 30 percent. If the best profit seen reaches 35 percent, the trailing-stop condition is met when profit drops below 25 percent. If the best profit climbs to 42 percent, the stop-out level rises with it, to 32 percent.
Trailing Stop Speed controls how the stop order itself is worked once the trail fires, using the same ladder as the regular Stop Speed setting. Every field is documented in Bot Settings: Trade Stop, Trailing Stops, and Launch on Stop.
Two ways to measure a trade's profit
Once a trade is on, there are two honest answers to "how is this trade doing?", and they stop agreeing the moment part of the trade closes:
- Overall trade profit counts everything: the profit already banked by any contracts that have closed, plus the unrealized profit of the contracts still open. This is the trade's bottom line, and it is what the profit columns and trade history on the Trading Dashboard report.
- Managed-position profit counts only the contracts the bot is still managing, measured per spread unit against those legs' entry prices. Banked profit and leftover longs held separately for sale are excluded. Those longs still belong to the trade and contribute to its overall profit.
For an untouched position with no contracts held separately, the two numbers are identical. From October 20, the trailing stop works from the managed-position measurement. The Profit Trigger, the best-profit level the trail follows, and the Allowance giveback are all evaluated against the managed position, so a decision to stop out is always about the risk still on the table, never about profit that is already safely banked.
When part of a trade closes, the trail starts over
Once recorded by the bot, any reduction of the managed position restarts the trailing stop for the contracts that remain: a partial profit target fill, a partial stop (such as one side of an iron condor stopping out), closing a portion of the trade from the dashboard, a managed leg expiring, an assignment that reduces managed contracts, or a reduction made directly at your broker. Restoring contracts to the managed position or correcting its entry prices also starts a new trail history. After a reduction:
- The best-profit level the trail was following is cleared. The remaining contracts begin with a clean slate.
- The trail re-arms when the remaining position's own profit reaches or exceeds the Profit Trigger. If it is already at or above the trigger, it can re-arm on the next check with complete prices after the position change has been recorded. Its new best-profit level starts from that check's profit, rather than the old peak.
- From then on, the Allowance is measured from the best profit the remaining contracts reach after the reduction.
The whole-trade numbers are unaffected: your dashboard and reports continue to show overall trade profit, including the best profit recorded for the whole trade, for the full life of the trade.
What does not restart the trail
- Selling a leftover long later. When a short leg closes while its long has no bid, the bot keeps that long and sells it once a buyer appears. Closing the short and moving its leftover long out of the managed position restarts the trail for the contracts the bot still manages. The leftover long's value and entry cost are excluded from the trail while it waits for a buyer. The later sale of the leftover long does not: its proceeds are added to the trade's overall profit, and the trail carries on with the same best-profit level and stop-out level it had a moment before.
- Editing the trail on a live trade. Changing the trigger or allowance with the pencil on the dashboard keeps the best profit the open contracts have already reached. The new values apply to it right away.
- Quotes coming and going. A bid appearing or disappearing on a leg changes the profit the trail reads, but does not by itself reset the best-profit level. A higher measured profit can still establish a new peak.
Take an iron condor with a stop on each side. The put side stops out while its long put has no bid, so the trail restarts and follows the call spread alone. The call spread runs to a new best profit. Two hours later the long put sells for $0.05. The sale records $5 per contract in proceeds toward the whole trade's profit, and the call spread's trail does not move.
A partial close, both ways
Here is a full timeline showing how the two measurements diverge. The trade is a 10-lot credit spread sold for a $1.50 credit per spread, with a 30 percent Profit Trigger and a 10 percent Allowance. The figures exclude commissions and assume the partial close fills at the stated profit.
| Event | Overall trade view | What the trailing stop does |
|---|---|---|
| Profit climbs to 35 percent ($0.525 per spread in option prices, $52.50 of real profit per spread) | Trade shows +35 percent, best profit 35 percent | Trail armed at 30 percent; stop-out level now 25 percent (35 minus the 10 percent Allowance) |
| Profit eases back to 28 percent | Trade shows +28 percent, best profit still 35 percent | No stop: 28 percent is above the 25 percent stop-out level |
| You close 4 of the 10 spreads, banking $168 of real profit | Banked profit plus 6 open spreads; best profit remains 35 percent in the history | Trail restarts for the 6 remaining spreads. Their own profit is 28 percent, below the 30 percent trigger, so the trail is disarmed |
| The remaining spreads dip to 20 percent | With the banked $168 counted, overall trade profit is 23.2 percent: ($168 banked + $180 still unrealized) / the original $1,500 credit | The trailing stop does not trigger at 20 percent because the remaining spreads have not armed their trail. Under the old calculation, 23.2 percent is below the old 25 percent stop-out level, so the trailing-stop condition would be met |
| The remaining spreads recover and reach 33 percent | Trade shows the combined banked and open profit | The trail re-arms at 30 percent and now follows the remaining spreads' own best of 33 percent; stop-out level is 23 percent |
| The remaining spreads fall to 22 percent | Overall trade profit shrinks but stays positive | The trailing-stop condition is met: 22 percent is below 23 percent. It triggers a close of the 6 spreads based on their own run, rather than the pre-close peak |
These percentages are trigger levels. Actual exits follow your Trailing Stop Speed settings, and the fill price can differ from the trigger price. Other enabled stops and profit targets still apply while the trail is unarmed.
The contrast in the fourth row is the whole point. Measuring the overall trade would let a peak set partly by contracts that are no longer open stop out the survivors, and banked profit would mask a real drawdown in the contracts that remain. Measuring only the open contracts means every trailing decision is earned by the position the stop would actually close.
The same rules in Option Dollars
Dollar trails, shown as Opt Dollars in the bot editor, follow identical logic. On the worked trade above, a $0.45 trigger with a $0.15 allowance is the dollar twin of the 30/10 percent trail: it arms once the open contracts show $0.45 of profit per spread ($45 of real profit) and stops when they give back more than $0.15 from their best level. After a partial close, banked dollars do not count toward the trigger, and the giveback is measured only from the best level the remaining contracts reach after the reduction.
Closing whole spreads preserves the per-spread scale. If 6 of 10 spreads remain, a $0.45 dollar trigger still means $0.45 of profit per remaining spread. For an uneven reduction, the original contract ratios define a spread unit, and the leg covering the most remaining units sets the unit count. For example, 7 shorts and 6 longs remaining from a 10-lot 1:1 spread are measured over 7 units, not the original 10. Percentage trails use the managed legs' net entry credit or debit as their basis, so an uneven reduction or one side of a condor closing can change the percentage basis. If that net basis is zero, a percentage trail cannot arm or fire.
What you see on the dashboard
For an open trade, the trailing stop details on the Trading Dashboard describe the position the trail is actually watching: the enable price that arms the trail, the stop-out price once armed, and the Current Best Profit Seen in the trailing stop editor all reflect the contracts the bot is still managing. After a reduction the best profit resets and the trailing stop line goes back to showing the enable price until the trail re-arms. The Max Profit figure in the expanded row details is a different number: it is the whole trade's best, closed contracts included, so after a partial close the two will usually differ. Once the whole trade closes, history shows the whole-trade figures, including the best profit recorded for the full trade.
The pencil beside the trailing stop line adjusts the trail for that one live trade without touching the bot's settings: change the trigger and allowance, reset the trade back to the bot's values, or disable the trailing stop for this trade entirely. If a managed leg has no quote, the bot holds off on trailing decisions until pricing is complete rather than act on a partial picture. That pause is always on, separate from the quote-quality checks described in Wide Bid-Ask Spread Protection.
Where to go next
Trailing stops build on the base stop covered in Stop Losses Explained and pair naturally with time-based Stop Adjustments. For the mechanics of how the engine checks the trail on every pass, see How Bots Trade.