Basket Orders

Description

Idea of Basket Orders Strategy is quite simple: it is almost exactly like a basket in supermarket - you choose products, collect them and you owe all of these you managed to take in time when you check out.

Basket Orders strategy was created to support investors in management of their long-term investition plans. Instead of manual buying or selling assets, user is able to single run Basket Orders Strategy that trades automatically, keeping required assets’ balance in its portfolio (Assets Proportion). This kind of automation allows to keep long-term investition save - algorithm is responsible for well-adjusted trading until Capital Supplies are exhausted, preventing danger situation in which investitions proportion is not kept.

This strategy is designed specially for work with many various assets. It may support both long and short positions and multiple types of assets in single portfolio. Main purpose to trade multiple assets at once in determined proportion is corelation between them. Basket Orders Strategy can be base of investment plan built on arbitrage or hedging. Aim of running Backtest Strategy is up to trader, but it is commonly used to reduce potential investition loss supporting shares with an adequate options or futures.

Basket Strategy is very generic. Its main purpose is to automatically and savely build portfolio designed by trader, but inside trading algorithms may vary depending on needs. Therefore single instances of Backtest Orders Strategy may take distinctive arguments. Common mechanism implemented in algorithm is stop loss - when price of any traded asset exceeds save boundaries defined by Stop Loss Prices strategy alarms supervisor trader and (if ordered to do this) may stop trading. All these futures make Basket Orders Strategy perfect tool for traders responsible for keeping many long term investment plans.

Market Data

  • Last trade
  • Order book (1st level or more depending of subalgorithms)
  • Statistics (usually)

Parameters

Parameter name Description Essential
Assets Proportion Proportion of assets’ values traded by strategy Yes
Capital Supplies Total capital that may be used in strategy’s portfolio composition Yes
Trade Horizon Time of strategy workflow after which portfolio should be alredy composed Yes
Stop Loss Prices Price boundaries which crossing is trigger to alarm supervisor and trading stop No

Conditions

Open position

Side Buy or Sell
Amount Dependent on subalgorithm
Price Dependent on subalgorithm
Type Dependent on subalgorithm

All opened positions depend on implemented trading subalgorithm. Basket Orders Strategy is just responsible for keeping proper balance between various assets in porfolio.

Close position

When Capital Supplies are exhausted, order execution would cause balance sway or stop loss mechanism is triggered.

Termination

Strategy works in scheduled Trade Horizon.

Time frame

Strategy is originally designed to support and automate long-term investition plans’ management. But it can be exploited in daily trading of many assets as well.

Further information & source

PLEASE NOTE: Empirica does not provide tax, investment, or financial services. The information available through this website is provided on an "as is" basis at user's sole risk and does not constitute trading advice or a solicitation to buy or sell any stock, option, future, commodity, or forex product. Empirica makes no guarantees as to the accurateness, quality, or completeness of the information and shall not be responsible or liable for any errors, omissions, inaccuracies in the information or for any user's reliance on the information. User is solely responsible for verifying the information as being appropriate for user's personal use, including without limitation, seeking the advice of a qualified professional regarding any specific financial questions a user may have. Past performance is not necessarily an indication of future performance. Trading is inherently risky.