Assumptions (Indian Stocks Trade Executions)
Last updated: 30 May 2024
Assumptions and guidelines we use for trade execution on Finosauras.
This document will walk you through the methods for ticker correction, entry price handling, stop loss and target calculations, investment assumptions, and more to ensure accurate and consistent trade processing.
Ticker Symbol Correction
Correct Spelling Errors: If the ticker symbol contains spelling errors, it is corrected to match known formats from the Indian stock market.
Expiry Month for Options and Futures: If a month is mentioned in the message, it is used as the expiry month for options and futures trades.
Commodity Recognition: "GOLD" and "SILVER" are recognized as commodities and are not corrected to stock names like "GOLDIAM" or "SILVERTUC".
Position
Explicit Position: If the position is explicitly mentioned as "BUY" or "SELL", it is used.
Default to Buy: If the position is not specified, it is assumed to be "BUY" for Intraday and bullish contexts such as BTST trades unless explicitly stated otherwise.
Entry Price
Specified Entry Price: If the entry price is provided, that value is used.
Default to Null: If the entry price is not provided, it is taken as null, which will take the Current Market Price.
Handling Ranges: If the entry price is given as a range (e.g., "183-185"), the higher side of the range is taken as the entry price.
CMP or OPEN: If the entry price is given as "CMP" or "OPEN," it is set to null, which will take the Current Market Price.
Execute within Range:
Stocks and Futures: The trade is executed even if the price is 1% higher or lower than the specified entry price.
Stock and Index Options: The trade is executed even if the price is 10% higher or lower than the specified entry price.
Stop Loss (SL) Price
Specified Stop Loss: If a specific stop loss price is mentioned in the message, that value is used.
Calculated Stop Loss:
If Target is Given and SL is Not: 50% of the target percentage is taken as SL.
If Both SL and Target are Not Given:
For stocks, index futures, and stock futures: 1.25% is taken as SL
For index and stock options: 10% is taken as SL
Target Price:
Specified Target Price: If a specific target price is mentioned in the message, that value is used.
Calculated Target Price:
If SL is Given and Target is Not: 200% of SL is taken as the target.
If Both SL and Target are Not Given:
For stocks, index futures, and stock futures: 2.5% is taken as the target.
For index and stock options: 20% is taken as the target.
Handling Ranges: If the target price is given as a range (e.g., "192-195"), the higher side of the range is taken as the target price.
CMP or OPEN: If the target price is given as "CMP" or "OPEN," it is set to null, which will take the Current Market Price.
Trade Period
Specified Period: The period of the trade can be one of the following: "Intraday", "BTST / STBT", "Weekly", "Monthly", "3-6 Months", "Yearly" or "Not Mentioned".
Default to Not Mentioned: If the period is not specified, it defaults to "Not Mentioned".
Intraday Trade Closing: If the trade is an intraday trade and the target or stop loss is not met, it is closed at 3:25 PM, else it continues.
Non-Trade Messages
Announcement or Informational Messages: If the message does not contain a trade call but is instead an announcement or informational message about upcoming trades, trade details are not extracted. Examples include:
"Buy finnifty zero to hero call @ 1pm"
"Powergrid SL and TGT didn't hit, exited at 7.70"
"Nifty 23000 ce 150 to 180"
Exclusion of Commodity Trades
Gold and Silver: No output is returned if the message contains "Gold" or "Silver". Commodity trades are avoided for now.
Quantity Information
Ignore Quantity: Any mention of quantity (e.g., "500 QUANTITY") is not included in the JSON output and is ignored.
Investment and Margin Assumptions
Stocks Buy/Sell: Invest up to ₹20,000 (adjust the quantity to be just under or at ₹20,000).
Index Options Buy: Invest up to ₹20,000 or 1 lot if more than ₹20,000.
Stock Options Buy: Invest up to ₹20,000 or 1 lot if more than ₹20,000.
Index Futures Buy/Sell: Maintain margin for 1 lot.
Stock Futures Buy/Sell: Maintain margin for 1 lot.
Index Options Sell: Maintain margin for 1 lot.
Stock Options Sell: Maintain margin for 1 lot.
Average Active Calls
Calculate Average Active Calls: Calculate the average number of active calls at a time for all categories for each group.
Minimum Margin Calculation: Multiply the average active calls with the category minimum investment in real time to calculate the minimum margin required at a time.
Add Buffer: Add a 25% buffer to the minimum margin required at a time to get the minimum investment.
12. Handling "Paid" or "Paid Group" keyword for SL and TGT
If the Stop Loss (SL) or Target (TGT) is mentioned as "Paid" or "Paid Group", do not set these values to null. Instead, use the following assumptions to determine the SL and TGT:
Stop Loss (SL): If "SL Paid" is mentioned, calculate the stop loss based on the entry price:
For stocks and futures: Set the stop loss to 1.25% of the entry price according to the position.
For stock options and index options: Set the stop loss to 10% of the entry price according to the position.
Target (TGT): If "TGT Paid" is mentioned, calculate the target based on the entry price:
For stocks and futures: Set the target to 2.5% of the entry price according to the position.
For stock options and index options: Set the target to 20% of the entry price according to the position.
Disclaimer:
Product Changes: The product is undergoing rapid changes. Some of the assumptions might have taken place after some calls. Therefore, all the calls do not strictly follow all these assumptions.
Keyword Filtering: Keywords like "Buy", "Sell", "Accumulate", "Exit", "Book Profit", etc., are used to filter messages. Therefore, many messages where a specific trade-related keyword is not used might be missed. The average trade execution rate is 64%, meaning 34% of messages might be missed. This rate can vary by group.
Future Improvements: A solution to achieve a trade execution rate of about 90% is being worked on.
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