Trade Template

Methodology fused from professional trading and investment frameworks; all text is an original paraphrase.

Defaults

Preflight

Run canonical pre-flight per contracts/preflight.md. Propagate X-Agentii-Trace per contracts/x-agentii-trace-header.md.

Data Source Priority

1. Upstream outputs — quantitative screening results + qualitative filtering assessment
2. Market data — current price, sector multiples, historical ranges via market data tools
3. Strategy frameworks — search_investment_strategies(kind=thesis) for thesis construction methodology

Methodology

Retrieval Scope

structured_only

Retrieval Strategy

Ownership & insider signals: search_institutional_holdings (top-10 holders + whale portfolios, direction=accumulating|reducing|new|exited) and search_insider_trades (Form-4 transactions with SEC URLs) are available as signal inputs.

Branch (d) Simple Lookup from contracts/retrieval.md: template methodology is embedded in this Protocol. Market data from data tools. Strategy frameworks via search_investment_strategies for thesis construction validation.

Temporal Scope

See frontmatter temporal_scope block.

Tool Allowlist

See frontmatter allowed_tools.

Protocol

This skill converts quantitative and qualitative analysis outputs into a structured, actionable trade template. A trade idea without a template is an opinion; with a template, it is a testable hypothesis. Every trade outcome becomes a learning data point because the template captures what was known and assumed at entry.

Detailed methodology: price target derivation with formulas, comps spreading workflow, GAAP/non-GAAP rules, scenario construction with probability calibration, and position sizing framework are in references/template-methodology.md.

Steps

1. Data Assembly: Gather all upstream outputs (quant metrics, financial validation, qual assessments, management/board flags, peer group, macro bias). Organize into template sections. Flag gaps — incomplete templates cannot support capital allocation.

2. Price Target Derivation (three methods, blend by business model per reference weights table):

   • P/E: Justified P/E triangulated from: historical range 25th-75th percentile, PEG-implied (growth × sector PEG), sector median with growth adjustment. Upper/lower bounds from bull/bear EPS × quartile multiples.
   • EV/EBITDA: For capital-intensive, highly levered, M&A contexts. Sector median ± growth/margin/ROIC adjustment. Target equity = Target EV − Net Debt.
   • Sales Multiple: For pre-profit/cyclical. Adjust for margin profile (5% margin at 2x P/S > 20% margin at 4x P/S). Recurring revenue premium.
   • Blend: asset-light 60/30/10 (PE/EV-EBITDA/PS), capital-intensive 30/50/20, financials 50/—/50(P/B), pre-profit —/30/70.

3. Trading Comps Spreading: Select 4-6 peers via dual-path. Spread revenue, EBITDA, EBIT, EPS, FCF (3yr historical + 2yr forward). Normalize for SBC/amortization/non-recurring differences. Calendarize different fiscal years. Output median + quartiles. Target multiple = peer median ± adjustment for growth, margin, ROIC, leverage, liquidity.

4. GAAP/non-GAAP Reconciliation: Identify all differences (SBC, amortization, restructuring, impairments, litigation, M&A, asset sales, debt extinguishment, tax). SBC: always include for true economic cost; may exclude for comps ONLY with flag. SBC > 10% revenue = structural issue. "Non-recurring" in 3+/4 quarters = recurring. Normalized = GAAP NI + justified adjustments. Show GAAP alongside.

5. Scenario Construction: Base 55% (consensus + variant view), Bull 20% (all catalysts, multiple expansion), Bear 25% (catalyst failure, contraction). Probabilities sum to 100%. Bear must be genuinely adverse. EV = Σ(Value × Prob). Margin of Safety = (EV/Price)-1. > 30% high conviction, 15-30% medium, < 15% watchlist.

6. Thesis Statement: One paragraph, five elements: (1) consensus view, (2) variant view + why, (3) dateable catalyst, (4) quantified return, (5) key risk. Format: "Market believes [X]. We believe [Y] because [evidence]. Converges when [catalyst] within [timeframe], generating [return] against risk of [downside]." Avoid: describing company (no variant), no catalyst, too long, no risk.

7. Position Sizing: Default 3-5%. Conviction: high→5%, medium→3-4%, low→watchlist. Binary catalyst→reduce 25-33%. R/R > 3:1→upper, 2:1-3:1→standard, < 2:1→skip. Correlation check: correlated with existing→reduce/replace. Hard Day-60 review: no catalyst→exit. Build football field. Handoff complete template.

Output File

{ticker}/{YYYY-MM-DD_HHMM}_trade-template_{affix}.md

Output Structure

1. Executive Summary — Thesis in one paragraph, price target, expected return, conviction level
2. Company Overview — Business description, sector, market cap, key financial summary
3. Quantitative Summary — Key screening metrics, outlier classification, financial validation highlights, peer group
4. Qualitative Summary — KPI assessment, MOP credibility (5-dimension scorecard), management/board quality flags, key catalyst(s)
5. Price Target Derivation — PE method (justified P/E triangulation), EV/EBITDA method, Sales Multiple method, blended target with weights, cross-checks
6. Trading Comps Output — Peer group with multiples, median/quartile statistics, calendarization notes, target multiple derivation
7. GAAP/non-GAAP Reconciliation — Key adjustments with justification, SBC assessment, normalized earnings calculation
8. Scenario Analysis — Bear (25%)/Base (55%)/Bull (20%) with probabilities, values, implied returns, probability-weighted expected value
9. Investment Thesis — Market view vs. variant view (all 5 required elements), catalyst for convergence, timeframe
10. Risk Assessment — Key risks, maximum adverse scenario, thesis invalidation triggers
11. Position Recommendation — Suggested position size with conviction/catalyst/RR rationale, entry strategy
12. Football Field Matrix — Trading comps vs. DCF vs. transaction comps vs. 52-week range vs. current price vs. target range
13. Coverage Gaps — Data limitations, assumptions flagged for monitoring

Error Handling

Memory Load

See contracts/memory-load.md.

Snapshot

See contracts/snapshot-synthesis.md.

Final Summary (TUI)

Include ### Key Citations block with 0-10 clickable /v/ URLs.

References

• references/template-methodology.md
• contracts/citation-and-memory.md
• contracts/output-frontmatter-schema.md
• contracts/memory-load.md
• contracts/snapshot-synthesis.md
• contracts/preflight.md
• contracts/retrieval.md