A.I.M. Users Bulletin Board

[Capitalist]

Hi TooFuzzy,

The current price shows up as a parameter as well. In BTB AIM, you will buy when your stock value drops enough.

If,

P1=Current Price
P2=Buy price (this is where my limit order will be set)
N=Current Number of Shares
SAFE is set at 10% of Stock Value
M=Minimum Order Size

Then initially,

Portfolio Control = P1*N (portfolio control = initial stock value)

Stock Value at the buy price is P2*N

You will buy if P1*N-P2*N-0.1*P2*N >= M

Solving for P2 yields:

(P1*N-M)/(1.1*N)

Which is a function of 3 variables; The current price, the number of shares you have, and the minimum order size.

Minimum order size DOES tend to mitigate the effects of residual buys as you said, however in the world of Micro-AIM where you may have a limit price of .034, but your order actually fills at .032, the residual order issue becomes more pronounced. That's why I used Tangential AIM to fix the problem.

Cap