When you buy options, a stop loss may not be too important unless you have purchased an ITM option paying a hefty premium. But when you sell options, your risk gets multiplied as you have no protection on the downside. For example, if you had sold put options on Infosys a day ahead of Vishal Sikka’s resignation, then your leveraged position would have resulted in massive losses on the day when Infosys crashed by 10%. In such cases, a stop loss to cut your losses is inevitable. Even if you have to book a slightly higher loss than anticipated, it is better than seeing your entire capital wiped out.