📊 Scoring System
Trade Picker uses a weighted scoring system to evaluate potential trading opportunities. Each stock on your watchlist receives four different scores based on various market factors.
Score Types
The system calculates four distinct scores for each stock:
| Score Type | Range | Description |
|---|---|---|
| Stock Long | -100 to 100 | Evaluates potential for buying and holding the stock |
| Stock Short | -100 to 100 | Evaluates potential for shorting the stock |
| Option Call | -100 to 100 | Evaluates potential for buying call options |
| Option Put | -100 to 100 | Evaluates potential for buying put options |
Input Factors
Scores are calculated using five key factors, each normalized to a scale of -100 to 100:
| Factor | Description | Data Sources |
|---|---|---|
| Sentiment | Overall market sentiment from news and social media | News articles, analyst ratings, social sentiment |
| Momentum | Price trend strength and direction | Price history, moving averages, volume patterns |
| Catalyst | Upcoming events that could move the stock | Earnings dates, SEC filings, corporate events |
| Risk | Volatility and downside potential | Historical volatility, beta, market conditions |
| Value | Fundamental valuation metrics | P/E ratio, P/B ratio, growth rates |
Scoring Formulas
🟢 Stock Long Score
score = (sentiment × 0.30) + (momentum × 0.20) + (catalyst × 0.20) + (value × 0.15) - (risk × 0.15)
The Stock Long score emphasizes:
- Sentiment (30%) - Positive market perception is crucial for upward price movement
- Momentum (20%) - Stocks with positive trends tend to continue trending
- Catalyst (20%) - Upcoming events can drive price appreciation
- Value (15%) - Undervalued stocks have more upside potential
- Risk (-15%) - Higher risk reduces the score (subtracted)
🔴 Stock Short Score
score = stock_long_score × -0.80
The Stock Short score is derived from the long score:
- It's essentially the inverse of the long score
- The 0.80 multiplier accounts for the inherent difficulty of shorting
- Stocks with very negative long scores become good short candidates
📈 Option Call Score
score = (sentiment × 0.25) + (momentum × 0.25) + (catalyst × 0.35) + (value × 0.05) - (risk × 0.10)
The Option Call score emphasizes catalysts more heavily:
- Catalyst (35%) - Options benefit most from specific events that cause price jumps
- Sentiment (25%) - Positive sentiment supports call option prices
- Momentum (25%) - Strong momentum helps options gain value quickly
- Risk (-10%) - Risk is weighted less since options have defined risk
- Value (5%) - Fundamental value matters less for short-term options plays
📉 Option Put Score
score = (sentiment × -0.25) + (momentum × -0.25) + (catalyst × 0.15) + (risk × 0.35)
The Option Put score is structured differently:
- Risk (35%) - High risk/volatility benefits put options the most
- Sentiment (-25%) - Negative sentiment supports put value (inverted)
- Momentum (-25%) - Downward momentum supports put value (inverted)
- Catalyst (15%) - Events can cause drops, benefiting puts
Weight Summary Table
| Factor | Stock Long | Stock Short | Option Call | Option Put |
|---|---|---|---|---|
| Sentiment | +30% | -24%* | +25% | -25% |
| Momentum | +20% | -16%* | +25% | -25% |
| Catalyst | +20% | -16%* | +35% | +15% |
| Risk | -15% | +12%* | -10% | +35% |
| Value | +15% | -12%* | +5% | 0% |
* Stock Short weights are derived from Stock Long × -0.80
Score Interpretation
| Score Range | Interpretation | Action Suggestion |
|---|---|---|
| 75 to 100 | Very Strong Signal | High priority opportunity - consider acting |
| 50 to 74 | Strong Signal | Good opportunity - worth researching further |
| 25 to 49 | Moderate Signal | Decent potential - needs additional confirmation |
| 0 to 24 | Weak Signal | Limited opportunity - probably skip |
| -25 to -1 | Neutral/Unfavorable | Not recommended for this trade type |
| -100 to -26 | Counter Signal | Consider the opposite trade type instead |
When Scores Are Calculated
Scores are automatically recalculated when:
- You run the scraper to collect new market data
- You manually trigger a recalculation from the stock details page
- New significant events are detected for a symbol
Limitations
Keep in mind:
- Scores are indicators, not guaranteed predictions
- Past performance doesn't guarantee future results
- Always do your own research before trading
- Consider multiple factors beyond just the score
- Market conditions can change rapidly