Introducing Underlying-Based Entry & Exit on Strategy Bot

Trading strategies are often built around key market levels rather than option prices. Traders commonly think:

• "Enter this strategy if NIFTY crosses 24,500."
• "Exit if NIFTY falls below 23,500."
• "Book profits if the underlying index or stock price reaches a target level."

With the latest enhancement to Strategy Bot, you can now automate your strategy execution using the Underlying Spot or Future Price of the index or stock, eliminating the need to constantly monitor the market.

What is Underlying-Based Entry & Exit?

Underlying-Based Entry & Exit allows you to start or exit an options strategy based on the movement of the underlying’s (index or stock) Spot Price or Future Price.

Instead of triggering execution based on:

• Combined Strategy LTP
  
• Premium value (price)
  
• Time-based conditions
  

You can now also trigger actions when the underlying index or stock reaches a predefined price level.

Supported Underlyings:

• NIFTY
  
• SENSEX
  
• BANKNIFTY
  
• BANKEX
  
• Other supported indices and stocks (companies) available on Strategy Bot
  

How Does Underlying-Based Entry Work?

When creating a strategy:

1. Navigate to the Execution tab.
   
2. Under Entry, select Underlying.
   
3. Select Trigger based on Spot or Future
   
4. Select when to execute:
   
   • Above or equal to
     
   • Below or equal to
     
5. Enter your desired Price level.
   
6. Start the strategy.
   

Example 1: Breakout Entry

Current NIFTY Spot: 24,013

Condition:

• Enter when NIFTY Spot is Above or Equal to 24,500
• The strategy remains armed and automatically executes once NIFTY Spot reaches 24,500.

Example 2: Breakdown Entry

Current BANKNIFTY Spot: 57,600

Condition:

• Enter when BANKNIFTY Spot is Below or Equal to 57,300
• The strategy executes automatically once the breakdown level is reached.

How Does Underlying-Based Exit Work?

Under the Exit section, you can set TP/SL exits based on the Underlying.

Take Profit (TP)

Exit the strategy when the underlying reaches a favourable level.

Stop Loss (SL)

Exit the strategy when the underlying reaches an unfavourable level.

Multiple Exit Conditions Supported

Strategy Bot supports multiple exit conditions, only in the case of Underlying based entry.

You can simultaneously configure:

• Underlying-based Take Profit
  
• Underlying-based Stop Loss
  
• Point or Rupees (₹) based TP/SL
  
• Exit Date & Time
  

Exit Logic

• The first exit condition that gets triggered will exit the entire strategy.

Example

Entry:

  - Enter when NIFTY crosses 24,500

Exit Conditions:

Take Profit:

  - Exit when NIFTY reaches 24,800

Stop Loss:

  - Exit when NIFTY falls below 24,350

Exit Time:

  - 3:19 PM

Points/Rupees:

  - 10 | ₹ 650 

Whichever occurs first will exit/square-off the strategy.

How Trigger Detection Works

Strategy Bot continuously monitors the underlying Spot or Future Price.

When the configured condition is met:

• Strategy Bot initiates strategy execution or exit.
• Orders are placed according to the configured strategy.

Trigger Validation & Protection

To ensure reliable execution, Strategy Bot applies validation checks.

1. Trigger Condition Already Met

If the entered trigger value has already been crossed, the strategy cannot be saved or started.

Example

Current NIFTY Spot:

  - 24,013

Condition:

  - Above or Equal to 24,000

Since NIFTY is already above 24,000, the trigger has already been satisfied.

Error:

  - Trigger condition already met. Please enter a value above current spot.

2. Spot Price Range Validation

Underlying trigger levels must remain within ±10% of the current Spot Price in case of Indices and ±20% in case of Stocks (companies)

Example

Current NIFTY Spot:

  - 24,000

Allowed Range:

  - 21,600 to 26,400

If a value outside this range is entered, Strategy Bot will display an error and prevent strategy creation.

Examples for Using Underlying-Based Triggers

For Breakout Strategies

Examples:

  - Long Call </br>
  - Bull Call Spread </br>
  - Bull Put Spread </br>

Use:

Above or Equal to:

  - Entry near important resistance levels.

For Breakdown Strategies

Examples:

  - Long Put </br>
  - Bear Put Spread </br>
  - Bear Call Spread </br>

Use:

Below or Equal to:

• Entry near important support levels.
  

For Range-Bound Strategies

Examples:

  - Iron Condor </br>
  - Short Strangle </br>
  - Short Iron Butterfly </br>

Consider using:

  - Underlying-based Entry & Exit </br>
  - Time-based Exit </br>

to manage risk effectively.

Benefits of Underlying-Based Entry & Exit

Trade Based on Market Structure

Execute strategies around support, resistance, breakout and breakdown levels.

Reduce Manual Monitoring

Let Strategy Bot monitor the market for you.

Avoid Emotional Decision Making

Automate entries and exits using predefined rules.

Align Strategy Execution with Market View

Create strategies that activate only when your market thesis is validated.