AIM UK

[ls7550]

One's personally preference then is to fine tune to those natural levels or just divide the rungs by percentage or fixed steps. I just prefer the former and you may prefer the latter

Another option to the Level Cost style I outlined over on the AIM-USERS board (which is more suited to linear/fixed step) is to use what Don Carlson calls Level Shares which I suspect you'd find to be better under proportional step Laddering.

Assume start stock price is $2.50 and we identify trade price levels of

 
 Price  #  
 Level  Shares 
  
 $10    1000       
 $5     1000 
 $2.5   1000 
 $1.25  1000 
 $0.625 1000 
 

Initially we need to hold 2000 shares (cost $2500) to accommodate the two higher (sell) trade prices levels of $5 and $10.

We also need to accommodate two downside buys of 1000 shares at $1.25 ($1250) and 1000 shares at $0.625 ($625), so total account requires $2500 + $1250 + $625 = $4375 of which $2500 is initially invested in stock (57% stock, 43% cash).

When the stock price has moved downwards to the next lower level you buy 1000 stocks. When the stock price moves up to the next higher level you sell 1000 stocks.