Monday, September 01, 2003 11:46:05 AM
We need a Universal AIM Algorithm. One that adjusts PC with respect to the size of the transaction.
Well, I don't know if we do need a UAA, but I have also noticed that all AIM action tends to die (or demands steadily rising prices) with alternating minimum buys and sells. The 'culprit' is the PC addition of course (it can't be my GTC orders, please pretty please!), so PC has to grow a lot less, perhaps not at all. So I propose in the context of this discussion to use a PCAF of (transaction size as % of Stock Value/PC/Total Value; your choice) * 50%, just for starters. For a 5% transaction, this becomes 5% of 50%, or 2.5% of the buy as addition to PC. You could top out at 50%. The additions to PC become rather small, however, which might bite you with other kinds of price action than alternating minimum buys and sells. Since those additions need to be really, really small for small transactions, you might try to scale the addition from 0 to 50% of the buy size for transaction sizes from 5% to 50%.
I leave the formulas to you
and I really don't know if I would like to call this UAA! And with those tiny additions, AIM almost becomes a Constant Dollar plan (=no change to PC).
Regards,
Qarel
Well, I don't know if we do need a UAA, but I have also noticed that all AIM action tends to die (or demands steadily rising prices) with alternating minimum buys and sells. The 'culprit' is the PC addition of course (it can't be my GTC orders, please pretty please!), so PC has to grow a lot less, perhaps not at all. So I propose in the context of this discussion to use a PCAF of (transaction size as % of Stock Value/PC/Total Value; your choice) * 50%, just for starters. For a 5% transaction, this becomes 5% of 50%, or 2.5% of the buy as addition to PC. You could top out at 50%. The additions to PC become rather small, however, which might bite you with other kinds of price action than alternating minimum buys and sells. Since those additions need to be really, really small for small transactions, you might try to scale the addition from 0 to 50% of the buy size for transaction sizes from 5% to 50%.
I leave the formulas to you
and I really don't know if I would like to call this UAA! And with those tiny additions, AIM almost becomes a Constant Dollar plan (=no change to PC). Regards,
Qarel
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