Zerodha has introduced a new and innovative feature on its Kite mobile platform, known as ‘Alert Trigger Orders’ (ATO). This feature represents a significant enhancement over the traditional alert system by not only notifying traders when specific market conditions are met but also by automating the execution of trades based on those conditions.
The ATO feature allows traders to set up a series of automated orders that are executed immediately once preset criteria are triggered. This automation ensures that trades are placed on the exchange without the need for manual intervention, which can be crucial in fast-moving markets where timing is everything. For instance, if a trader wants to purchase stocks when the Sensex drops by 10%, they can set up an ATO to automatically execute the buy order once the Sensex reaches the specified threshold.
Nithin Kamath, the founder and CEO of Zerodha, provided further insights into the functionality of ATOs. He explained that the feature allows for complex trading strategies based on ‘if this then that’ conditions. For example, a trader might set an ATO to buy Reliance shares if the Nifty 50 index crosses 25,000, or to execute a Nifty short straddle—selling both a call and put option at the same strike price—if the Nifty 50 falls to 24,975. This capability enhances the flexibility and precision with which traders can manage their portfolios.
Additionally, ATOs come with ‘market price protection,’ which aims to reduce the risk of price fluctuations when executing trades. This ensures that the orders are executed at the most favorable prices available at the time of trade placement.
For those looking to utilize this new feature on the Kite platform, the setup process is designed to be straightforward. Traders start by selecting the desired instrument and creating an alert, which can be customized with a specific name. They then choose 'Alert Trigger Order (ATO)' and set the relevant data point, instrument, operator, and price conditions. Instruments can be added to a basket of up to 20, with options to buy, sell, or add to the basket. Parameters such as price and order type are inputted, and the market price option can be selected to ensure the best execution price.
This new feature aims to streamline trading strategies, providing traders with greater efficiency and an edge in volatile market conditions. By automating the process and incorporating features like market price protection, Zerodha continues to enhance its platform’s capabilities, catering to the needs of both novice and experienced traders.
