Wheel Suitability Score — Methodology

What Is the Wheel Suitability Score?

The Wheel Suitability Score (WSS) is a composite score from 0 to 10 that measures how well a given F&O-eligible stock suits the wheel strategy at a given point in time. It combines fundamental quality, options market conditions, price behaviour, event risk, affordability, and technical structure into a single actionable number.

The WSS is a point-in-time analytical assessment. It is not a price prediction, not a trading signal, and not investment advice. It is a structured way of asking: given everything we know about this stock today, how well does it fit the wheel?

Scores are computed daily using data from the NSE F&O bhavcopy, the NSE CM bhavcopy, corporate announcements, and Dept 9 monthly technical assessments. Every score has a timestamp. Every score has a reason. There are no black boxes.

The Formula

WSS v1.2 — 7 components, weights locked:

Each sub-score is normalised to 0–10 before weighting. The composite WSS is expressed on a 0–10 scale, rounded to one decimal place.

The 7 Components — In Detail

1. Fundamental Score (FS) — 25%

The FS measures whether the underlying business is safe to own if a Cash Secured Put is assigned. Inputs: debt-to-equity ratio, promoter holding, PAT track record, market cap, free cash flow, ROCE, and sector-specific ratios. Hard gateway: FS below 4.0 forces a SKIP verdict regardless of other scores.

Promoter holding exceptions apply for foreign parent companies (Exception A), widely held professionally managed firms (Exception B), and government-majority PSUs (Exception C). Evaluated against adjusted benchmarks and disclosed on every stock card.

Current status: FS uses a neutral 5.0 placeholder pending Trendlyne API activation (targeted Month 7–8). All other sub-scores compute from live bhavcopy data. Disclosed on every card.

2. Options Liquidity Score (OLS) — 20%

The OLS measures whether you can actually trade this stock's options at a reasonable price. Inputs: total front-month open interest in lots, bid-ask spread as a percentage of mid-price, traded volume, and put-call ratio. Hard gateway: OLS below 3.0 forces a SKIP verdict.

3. IV Score (IVS) — 15%

The IVS measures the richness of the options premium environment. Inputs: IV Rank (52-week), IV Percentile, and current IV vs 30-day historical volatility. Optimal zone for wheel: IVR 50–80. IV history seeded from Dhan historical data at launch and accumulates from daily NSE F&O bhavcopy thereafter.

4. Price Stability Score (PSS) — 10%

The PSS measures whether the stock is in a stable price regime. Inputs: 30-day historical volatility (annualised), DMA slope (20-day and 50-day), and maximum 52-week drawdown. Stocks with an active downtrend override receive a PSS cap of 4.0.

5. Event Risk Score (ERS) — 10%

The ERS measures near-term event risk. Inputs: days to next earnings, F&O ban status, ASM/GSM surveillance stage, and corporate announcements. ERS batch runs daily at 08:00 IST. Corporate event trigger runs every 30 minutes during market hours for intraday announcements.

Earnings lockout rule: when earnings are within 7 calendar days, ERS floors at 2.0 and an EARNINGS LOCKOUT tag appears on the card. Always verify earnings dates independently via nseindia.com before opening positions.

6. Affordability Score (AFS) — 10%

The AFS measures capital accessibility. Estimated SPAN margin = CMP × lot size × 20% (proxy pending live NSCCL data). Stocks with estimated margin below Rs. 50,000 score AFS 8–10. Above Rs. 5 lakh score AFS 1–2. Margin source disclosed on every card.

7. Technical Score (TS) — 10%

The TS integrates structural technical context — trend quality, key levels, momentum, chart patterns — sourced from Dept 9 monthly series assessments delivered by Wednesday 09:00 IST after each expiry Tuesday.

Outlook tags: STRONG_BUY_ZONE (≥8.0), FAVOURABLE (6.5–7.99), NEUTRAL (5.0–6.49), CAUTION (3.5–4.99), AVOID (<3.5). Displayed alongside the numeric score on every stock card.

Verdict Thresholds

Hard overrides: FS below 4.0 or OLS below 3.0 forces SKIP regardless of composite score.

Override Tags

Override tags flag conditions that warrant extra caution, independent of the composite score.

Score Updates

Every stock card displays a Last updated timestamp showing when the score was last computed — the actual computation time, not the page render time.

Score SLA: if a score is not updated within 48 hours, the DATA STALE tag appears and a −1 point penalty is applied to the WSS composite.

Technical Score — Series Timing

Each monthly F&O series runs from the Wednesday after the previous expiry through to the last Tuesday of the current month. NSE moved monthly expiry from last Thursday to last Tuesday effective May 2026 series.

Dept 9 delivers the TS payload for the new series by Wednesday 09:00 IST — approximately 18 hours after the previous series expires. During this window, WheelDesk displays a TRANSITIONAL flag and carries forward the previous series TS with no penalty.

If Dept 9 misses the Wednesday 09:00 IST deadline, the TRANSITIONAL flag converts to STALE and a −1 point penalty applies. Disclosed on the card.

What the Score Is Not

The Wheel Suitability Score is an analytical tool for informational and educational purposes only. It is not investment advice. It is not a recommendation to buy, hold, or sell any security. It is not a prediction of future performance.

WheelDesk is not registered with SEBI as an Investment Adviser under SEBI (Investment Advisers) Regulations, 2013, or as a Research Analyst under SEBI (Research Analysts) Regulations, 2014.

Options trading in derivatives involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You may lose some or all of your invested capital.

Past WSS scores are not indicative of future scores or future returns. A stock that scored 8.5 last quarter may score 4.0 this quarter. The WSS reflects a point-in-time analytical assessment, nothing more.

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