Trade Recommendations

Weighted Trade Desirability

As stated in the glossary, tradeDesirability is :

A calculated value is used in determining the desirability of executing trades when optimizing according to the portfolio method. It is also used when ranking trades for possible execution when optimizing according to the issueMethod. It is calculated as:

(if tradeDesirability >= 100.0)

weightedTradeDesirability = tradeDesirability * tradeWeight

(if tradeDesirability < 100.0)

weightedTradeDesirability = 0

Note that the weighting is by value, favouring the execution of larger trades in precedence to smaller.

Values of "weightedTradeDesirability" for all trades examined may be viewed on the tradeReport via the "View|Weighted Trade Desirability" selection on the tradeMenu.

The best trades ranked by "weightedTradeDesirability" may be displayed in the bestTradesReportBox via the "by weightedTradeDesirability" selection on the tradeMenu|Reports|BestTrades popup menu.

The calculation and importance of tradeDesirability has been discussed elsewhere in the User Manual.

tradeWeight is:

A measure of the importance of the trade to the holdings of the portfolio. When optimizing according to the issue method when desired swap issues is equal to zero (i.e., when performing a theoretical calculation) the value of "tradeWeight" is set to 1.0. In the portfolio method and in the issue method when desired swap issues is non-zero (i.e., when performing a calculation for an actual trading portfolio) it is

tradeWeight = (buyWeight + sellWeight) / 2

This value is reported in the riskMeasurementCalculationBox.

Thus, weightedTradeDesirability is a quick and accurate method of finding possible trades: it will be zero if the trade should not be executed, but if positive ranks the trades according to their importance.

Values used in the calculation of "weightedTradeDesirability" may be found via:

Value	Reported on	Via Menu
tradeDesirability	tradeEvaluationReport	tradeReportContextMenu (right-click the appropriate grid element on the tradeDocument
tradeWeight	tradeEvaluationReport (buySize and sellSize only)	tradeReportContextMenu (right-click the appropriate grid element on the tradeDocument