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Dynamic Contract

Dynamic Contract enables users to set the contract selection details while they create the strategy, based on which the system will select current relevant strikes. It simplifies the task strike selection process which takes some time to be done manually.

Note

Dynamic contract is only applicable for creating strategies and not for creating scanners.

Steps for selecting a Dynamic contract

There are 3 simple steps to set a Dynamic Contract.

  1. Select an underlying. For example, Nifty 50 Indices in Create page.
  2. Click on the underlying (here, Nifty), you will get a pop-up to convert it to a dynamic contract.
  3. Set the parameters for strike selection

Dynamic Contract

Dynamic contract Parameters

Contract Type: You can select either Call or Put of the underlying

Offset: This enables users to set whether they want to trade using ATM, ITM, or OTM. Offset ‘0’ will select the ATM and Offset ‘2’ will select two strike prices above the ATM strike price and Offset’-2′ will select two strike prices below the ATM. The general rule for Offset in Dynamic Contract is negative(-) is Lower strikes and Positive(+) is Higher Strikes.

Expiry: You can select whether you want to trade on the Current contract or the Next contract

Expiry Type: This enables you to select either Monthly contracts or Weekly contracts

Order Type: You can set whether you are Long or Short on the contract. This setting will always supersede the Strategy position i.e. Buy/Sell. This is because with Options you can short put and be bullish. Additionally, it enables you to create Spread, which may require you Long and Short on different contracts in the same strategy.

Change Frequency: This setting will determine how often you want the strike to be changed.

  • Candle: This will choose the ATM/OTM/ITM strike price after every candle Close. The candle interval will depend on the base timeframe of the strategy.
  • Day Open: This will choose the ATM/OTM/ITM strike price on the basis of the Day’s Open price. It will remain consistent throughout the day since Open will not change.

Usefull Links

You can read the feature release blog here. You can also watch this webinar.