Markets: A Rigorous Course

M15 · Problem 3 ★★ Check

The Coal India plan and the chance of being stopped on noise

On the pullback day (6 Apr 2026) Coal India had high ₹461.45, low ₹447.40 and 14-day ATR ₹13.67. (a) Compute the buy-stop trigger, the fill (trigger plus 0.1%), the initial stop (to two decimals, rounding up), the risk per share and QQ. (b) Using M04A (4A.12), express the stop distance in daily standard deviations kk. (c) Using the driftless formula 2Φ(−k/n)2\Phi(-k/\sqrt n) of M04A Table 4A.1, compute the probability that the stop is touched within 10 sessions. Explain why the time stop of rule 9 matters more for this setup than for a setup with a 3-ATR stop.

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