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Magic Formula

In our algorithm we have made a condition not to make any transaction between February to November, but it is doing transactions in months apart from January and December. How to solve this problem? Please Help.

1 response

The transactions you are seeing are associated with delisted stocks. The backtester automatically closes any positions of delisted stocks. The shares will go to zero and the portfolio will be credited with cash equal to the closing value on the day the delisting took place. Note that the opposite can also happen with other types of corporate actions. With a 'spin-off' or 'merger' one may see shares of an unknown stock suddenly appear in ones account. Additionally, dividends are automatically credited to ones account as of the payout date. These show up as an increase in cash.

All these actions are exactly what one would see in a real brokerage account. A broker will automatically adjust your account similar to what the backtester does. The backtester is designed to mimic very closely the account transactions which would happen in real life.

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