Full Disclosure : Am a newbie trader. Am just looking for some answers to questions as mentioned below. Also if an experienced person can find a caveat which I missed, please don’t hesitate to point it out…
Given that most of the times BO is unavailable due to “volatile markets…” but I still kinda feel the requirement of safety net, which is a three leg position = Position Order + Stoploss(Trailing) Order + Target Order
Assumptions for taking this trade :
I am talking about Algorithmic Trading, so basically there is code running which is managing my trades and communication from exchange (directed via KiteConnect WebSockets)
I am not keen on using Cover Orders alongside the another Target order. Also since there are restriction on to the band in which the stoploss values can lie.
BO orders are usually not available through the day/weeks (in the current case for almost an year) depending on the market volatility. Hence are unreliable.
Reliance VaR+ELM right now is = 17.75 %; Reliance is currently trading at : Rs ; 2,094.45. My current trading account balance is Rs 10,000.
I have no other active positions.
I have gone through this article - Margins- 2 Exit orders for 1 position; but as this article is too old (2013) am unsure of the applicability of it in 2021 also unsure of the implications of new margin rules.
I will need to have 3 corresponding LEGS to a position which will be punched by my RMS system - ACTUAL ORDER + STOPLOSS (Trailing) ORDER + TARGET ORDER
Actual Position Order : An MIS order of Instrument RELIANCE LONG @26 quantity at price 2094.45 with LIMIT type is placed. Total Margin Blocked : Rs 9665.89
- Timestamp [email protected]_ORDER[a new MIS buy order] : 26 QTY buy @ 2094.45
- Lets say this order is executed at the exchange in succession like, at
- Timestamp [email protected]_TRADE1 : 10 QTY filled @ 2094.45
- Timestamp [email protected]_TRADE2 : 10 QTY filled @ 2094.45
- Timestamp [email protected]_TRADE3 : 06 QTY filled @ 2094.45
Stoploss Order : My code keeps on listening to the filled_quantity in the WebSocket on_order_update and as the new trades are executed, and as soon as I get new fill I will send an update to stoploss order for the new total fill quantity.
Target Order : My code keeps on listening to the filled_quantity in the WebSocket on_order_update and as the new trades are executed, and as soon as I get new fill I will send an update to target order for the new total fill quantity
The order of succession will be as below
- I am unsure of the calculations in the red cells, i.e what will be my margin requirements when I spawn two New sell trades one for Stoploss and one for Target even though my trading account has only 334.11 cash left.
- How will the calculations be different when the Stoploss and Target orders are updated.
I am unable to see a file attachment option otherwise I would have attached the table. Although if you want kindly post your email address. @siva @nithin @ShubhS9 any sort of help would be appreciated! Thanks