Welcome to the Auto Trade Bot

This bot is designed for the average investor seeking to gain a competitive edge against large-cap institutional retail investors.

Overview

The Auto Trade Bot incorporates advanced strategies, including options trading analytics and risk management, to optimize trading decisions and manage portfolio risk effectively.

Key Features

• Options Analytics: Calculates implied volatility and Greeks for options to inform trading decisions.
• Risk Management: Implements risk management strategies to limit losses and optimize returns.
• Dynamic Updates: Adjusts trading strategies based on real-time market data and portfolio performance.
• Sector Allocation: Ensures diversification by maintaining sector allocation limits within the portfolio.
• Automated Reporting: Generates and sends summary reports to a designated Teams channel for monitoring.

Main Components

Risk Management

• RiskManagement class:
  • validate_trade: Validates trades against predefined risk limits.
  • calculate_quantity: Determines the appropriate position size based on current market conditions and account equity.
  • rebalance_positions: Adjusts portfolio allocations to align with target sector weights.
  • update_risk_parameters: Modifies risk parameters in response to portfolio profit and loss (P&L).
  • report_profit_and_loss: Computes and reports the total portfolio P&L.

Options Trading

• OptionsAnalytics class:
  • calculate_implied_volatility: Estimates the implied volatility for each option contract.
  • calculate_greeks: Computes Delta, Gamma, Theta, and Vega for option contracts to assess risk and sensitivity.
• greekscomp.py: Contains the functions for Black-Scholes pricing, implied volatility estimation, and Greeks calculations.

Data Management

• Aggregates options and company overview data in MongoDB for efficient analytics.
• Utilizes Alpaca API for trade execution and portfolio management.
• Fetches real-time market data to inform trading decisions.

Workflow

1. Initialize the bot with necessary configurations, including Alpaca API credentials and MongoDB connection details.
2. Aggregate options data with company fundamentals in MongoDB for comprehensive analytics.
3. Perform options analytics to calculate implied volatility and Greeks for identified trading opportunities.
4. Assess trade viability using the RiskManagement class, considering current market conditions and portfolio risk.
5. Execute trades through the Alpaca API, adhering to the bot's risk management and sector allocation strategies.
6. Continuously monitor and adjust portfolio positions, rebalancing and updating risk parameters as needed.
7. Generate and send summary reports to the designated Teams channel, providing insights into portfolio performance and trading activities.

Optimization and Customization

Other engineers can optimize the bot by:

• Enhancing the Greeks and implied volatility calculations for accuracy in different market conditions.
• Refining the risk management strategies to adapt to varying levels of market volatility.
• Incorporating additional data sources for more informed trading decisions.
• Customizing the sector allocation strategy to align with individual investment preferences and goals.