Replies to post #37762 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Hi Tom!

I still like my formulae better. ;-)

They mathematically line up better with Lichello and easily accomodate Minimum $.

Formulae are easy in Excel as well.

They were worked out with paper, pencil and calulator at lunch over a number of weeks. My version of thought experiments.

[ls7550]

Re AIM Hold Zone calculation

N = Portfolio Control divided by Number of Shares

For the next sell price divide N by 1 minus safe minus minimum trade % i.e. if safe = 10%, minimum trade size = 5% then 1 - 0.1 - 0.05 = 0.85 (so N / 0.85)

For next buy price divide N by 1 + safe + minimum trade % i.e. if safe = 10% minimum trade size = 5% then 1 + 0.1 + 0.05 = 1.15 (so N / 1.15)

[SFSecurity]

Hi Tom, First of all when I upgraded Firefox it did "Hide the stickies" so I did not see them. When I finally noticed the setting they popped up.

Now that is solved I refreshed my memory of yours where you say:

NSP - Next Sell Price
NBP - Next Buy Price
SO - # of shares owned
MSO - Min. # Trade Shares/Order
PC - Portfolio Control

                        PC  
  NSP =        --------------------- 
                 SO (0.9 - (MSO/SO))  
    
                         PC  
  NBP =        ---------------------  
                  SO (1.1 + (MSO/SO))

One could change the formula to use a percentage of the stock rather than a fixed number by changing the formulas to:

NSP - Next Sell Price
NBP - Next Buy Price
SO - # of shares owned
PSO - Min. % Trade Shares/Order as whole number times 5 (5% would be 5*5=25, 10% would be 10*5=50
PC - Portfolio Control

                          PC  
  NSP =        -----------------------  
               SO (0.9 - ((PSO*5)/SO))  
    
                          PC  
  NBP =        -----------------------  
               SO (1.1 + ((PSO*5)/SO))

So, if the percentage was 5% with PC being $5000 and the number of shares 500 at $10/share the results would be:

                        5000 
  NSP =        ----------------------  
                500 (0.9 - (25/500))  
    
                        5000 
  NBP =        ----------------------  
                500 (1.1 + (25/500))

for a next sale at $11.75 and a next buy at $8.70.

If one wanted to sell 1% of the shares then the prices would be a sell at $11.24 and a buy at $9.01.

If one wanted to sell 10% of the shares then the prices would be a sell at $12.50 and a buy at $8.33.

If one wanted to sell 20% of the shares then the prices would be a sell at $14.29 and a buy at $7.69.

Best,

Allen