Discrepancies between recent global earth albedo anomaly data obtained from the climate models, space and ground observations call for a new and better earth reflectance measurement technique. The SALEX (Space Ashen Light Explorer) instrument is a space-based visible and IR instrument for precise estimation of the global earth albedo by measuring the ashen light reflected off the shadowy side of the Moon from the low earth orbit. The instrument consists of a conventional 2-mirror telescope, a pair of a 3-mirror visible imager and an IR bolometer. The performance of this unique multi-channel optical system is sensitive to the stray light contamination due to the complex optical train incorporating several reflecting and refracting elements, associated mounts and the payload mechanical enclosure. This could be further aggravated by the very bright and extended observation target (i.e. the Moon). In this paper, we report the details of extensive stray light analysis including ghosts and cross-talks, leading to the optimum set of stray light precautions for the highest signal-to-noise ratio attainable.