April 26, 2024In the world of algo trading, everything is dynamic. Traders need to be on their toes when it comes to trading algos. Be it fluctuations in the indices or changes in regulations laid down for trading, each has a significant impact on algo traders and their portfolios. And, a recent change in regulation by SEBI has left traders scratching their heads. But, we’re here to help you decode the same.
As you know, the Securities and Exchange Board of India (SEBI) regulates the markets in India and updates certain aspects related to trading from time to time. A recent update from SEBI regarding lot sizes for Nifty has had some impact on the strategies under uTrade Originals.
Here, we’ll discuss significant points about SEBI’s change in lot size on portfolios and uTrade Originals strategies. Read on!
SEBI Lot Size Adjustments: What Has Changed?
A lot is the number of units of a financial instrument that’s traded on an exchange. In this case, the instruments impacted are futures and options. SEBI has reduced the lot size of these for Nifty.
Effective April 26th, 2024, the lot size for Nifty will be reduced from 50 to 25.
This has resulted in a positive impact for traders who rely on uTrade Originals for their algo trading journey. But, what exactly is uTrade Originals? Let’s discuss these and also understand the impact of SEBI’s lot size changes on them.
uTrade Originals: Trade like a Pro
To trade in Options, traders must have their strategy in place. But, what if we tell you that you can easily get access to expert-crafted strategies by industry veterans, offering invaluable market insights? Sounds exciting, right? That is exactly why we, at uTrade Algos, brought forth uTrade Originals.
uTrade Originals helps you trade like a PRO on uTrade Algos with the help of strategies by industry experts. With a single click, you can select the uTrade Originals that aligns with your goals and objectives and you’re good to go. The powerful algorithms will then take the reins, executing trades on your behalf and helping you trade like a PRO.
Among our list of uTrade Originals, the ones mentioned below are live:
- Shaant Bazaar Ka Raja aka Auto Straddle intraday selling strategy
- Dual Nifty aka DN for for Wednesday and Thursday Nifty trading sessions
- Chakravyuh Ka Tod Nifty aka Open Interest-Based Strategy focusing on Bank Nifty weekly options
- Turtle Trader combines three strategies within one portfolio
Why Pick uTrade Originals?
1. Strategies for every market
On uTrade Algos, you get access to expert-crafted strategies for every type of market. Be it bearish, bullish or volatile, our expert strategies on uTrade Originals help you navigate through the ups and downs smoothly.
2. Offers diversification
Every algo trader has his own goals and targets. uTrade Originals offers a diverse range of algorithms to cater to your specific needs as a trader.
3. Save time
Often to create a strategy, traders need to spend days analysing the markets. But, with uTrade Originals, just with one click, traders get access to strategies curated by experts from the industry. They just need to subscribe to the uTrade Originals strategy and voila, they’re good to go. Our algos take over and leave you with time to focus on other trading-related aspects.
Now that we’ve explained what uTrade Originals are, let’s understand the impact of the changes in lot size on them in the following section.
Impact of SEBI’s Change on uTrade Originals
Before you sweat about your portfolios, let us explain how the SEBI lot size change has impacted our uTrade Originals. The following automated options strategies will require adjustments:
- Shaant Bazaar Ka Raja
- Dual Nifty
- Chakravyuh Ka Tod Nifty
- Turtle Trader
Changes to Turtle Trader Strategy
The Turtle Trader strategy, which combines three strategies within one portfolio, requires a specific adjustment. Only the Nifty strategy within Turtle Trader will be modified. This involves doubling the traded lots for both call and put options while maintaining existing exit parameters and margin requirements.
Adjustment to be made only for Nifty strategy: Turtle Trader
Existing traded no. of lot = 1 lot each (CE/PE)
Revised traded no. of lots = 2 lots each (CE/PE)
The following table will clearly show the changes in margin blocking per multiplier and exit parameter values.
| NEW PARAMETERS AFTER LOT SIZE ADJUSTMENTS (W.E.F 26th APRIL 2024) | |||||||
| S.NO | STRATEGY | CURRENT MARGIN | CURRENT EXIT PARAMETERS | NEW MARGIN | NEW EXIT PARAMETERS | ||
| SL | TP | SL | TP | ||||
| 1 | Shaant Bazaar Ka Raja | 165,000 | 2,000 | NA | 80,000 | 1,000 | NA |
| 2 | Chakravyuh Ka Tod Nifty | 165,000 | 1,200 | 1,200 | 80,000 | 600 | 600 |
| 3 | Turtle Trader* | 4,00,000 | BNF1-900,BNF2-450,NF-1,100/PF-3,900 | NA | 4,00,000 | BNF1-900,BNF2-450,NF-1,100/PF-3,900 | |
| 4 | Dual Nifty | 165,000 | 2,400 | NA | 80,000 | 1,200 | NA |
This means that the change in the lot sizes has brought about good news for traders. Now you can trade with a minimum investment of Rs 80,000. This is the minimum amount needed if your strategy chosen is Dual Nifty, Chakravyuh Ka Tod Nifty and Shaant Bazaar Ka Raja.
Also, according to the change, the parameters of Stop Loss and Target Profit have changed for the uTrade Originals Strategies for Nifty. For Shaant Bazaar Ka Raja, the stop loss has gone down Rs 2000 to 1000. Similarly, for Chakravyuh Ka Tod Nifty, both the stop loss and target profit have gone down to Rs 600 from Rs 1200. Similar changes can be seen clearly in the table above for Turtle Trader and Dual Nifty.
Conclusion
At uTrade Algos, we are constantly optimising our uTrade Originals strategies to ensure they remain effective in a dynamic market environment. That being said, we are committed to keeping you informed about any changes that might affect your algo trading experience.
