Replies to post #38272 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

I hope everyone remembers not to buy a $30 shirt "on sale" for $29.95!

Awww come on! Most people could almost do that in their head, 30 / 1.2 = $25 :)

1 T-Shirt @ $30, Portfolio control = $30, #Shirts = 1

Next buy price
PC / ( #S x ( 1 + SAFE + Minimum Trade Size ) )
= 30 / ( 1 x 1.2 ) (assuming 10% safe, 10% min trade size)
= £25 next buy price

Next Sell Price
PC / ( #S x ( 1 - SAFE - Min Trade size ) )
= 30 / ( 1 x 0.8 ) = $37.50

Changing Min trade size to 5%
next buy price = 30 / ( 1 x 1.15 ) = $26.09

Most people wont however own just 1 shirt (share)

100 shirts, $30 each, next buy price :
Portfolio Control = 3000
#S = 100
3000 / ( 100 x 1.2 ) = 25 (assuming 10% safe and 10% min trade size)

3000 / ( 100 x 1.15 ) for 10% safe, 5% min trade size = 26.09

Doh!