AIM Calculator Price Range Calculation Feature for Percentage Price Move

The AIM Price Range Calculation feature allows you to determine the transaction prices required for a given desired percentage price move and for a given desired incremental dollar difference.

The calculator just calculates the next BUYs and SELLs for individual prices or for a range of prices. For record keeping, I just use a spreadsheet.

From the last line of the spreadsheet I enter into the calculator, manually, the stock symbol (optional), the present quantity held, the Portfolio Control (PoCo), and the cash held (optional). The cash held entry is used only when setting the minimum order as a percentage of the total account value -- the stock value plus the cash.

Also, from the spreadsheet I enter in the NET price of the last transaction. That last transaction could, naturally, be either a BUY or a SELL.

Refer to screenshot
http://www.bean-d.com/cpt/graphics/aim_rangecalcex.gif

And a range calculation printout sample at
http://www.bean-d.com/cpt/detail/aim_rangecalcex.txt

You will notice on the screenshot and the printout that, for this example, I have set the min BUY order for 5% of PoCo and the min SELL order for a fixed $125.00.

Given those entries, along with the SAFE settings, the minimum SELL price AIM will allow in this example is $7.32. This is shown right above the "No Transaction Zone" (aka the "Hold Zone") legend in the printout. The quantity to sell is 19. While the transaction price would be $7.32, the NET price you would get, considering a commission of $10.01, would be $6.793158. These values are all on the $7.32 transaction price row.

In the example, the previous NET price entered is $6.25. The percent NET price difference is then 8.69% and is shown in the next to last column of the $7.32 transaction price row.

The NET DOLLAR difference of $10.32 is shown in the last column of the row. (($6.793158 - $6.25) * 19 shares).

That $10.32 COULD be a profit or not. That depends on whether the last transaction was a BUY or a previous SELL.

By the way, I would not myself take that $7.32 transaction price transaction in this example. I would scan up the last two columns for the first transaction that meets both my personal percentage and dollar criteria.

Arbitrarily, for this example, if you wanted 10% that would mean a transaction price of at least $7.37 would be required. And if you wanted at least a $50 NET DOLLAR difference, that would require a transaction price of at least $7.79.

NOTE: You can enter in ANY price you want for the last NET price. So you could enter in the NET price for some transaction other than the very last one. That does NOT affect the Next BUY or Next SELL calculations based on the quantity held and PoCo. It WILL effect, naturally, the last two columns.

This FAQ is also at
http://www.bean-d.com/cpt/aim-stock-price-range-calculation.php

More AIM articles are at
http://www.bean-d.com/cpt/index.php

AIM and Put Options

AIM and Puts -- For years I have heard of "protecting your stock position with Puts (put options)".

There are probably "millions" of books about options, but I came across "How to Make Money Trading Listed Puts" by Lin Tso. Dates from 1978 and only a few copies available used on Amazon. It's an excellent book with lots of examples, from just buying Puts to doing Put spreads.

How to Make Money Trading Listed Puts, by Lin Tso takes you to the Amazon info page.

A point of interest, p. 42:
"Trading for Down Fluctuations
Under the protective umbrella of a put option, one can play down fluctuations of the underlying stock.
This trading technique involves making a number of short-term transactions through buying the stock on dips and then selling the stock out on rallies. There is no limit to the number of trades that can be made against a particular put during the life of the option."

I don't know if Puts would be cost effective with standard AIM, as all or most of the $50 to $500 or so that a Put costs will usually disappear, so you have to make that amount and more on your AIM buys and sells during the life of the Put.

So, one of the more aggressive forms of AIM, like LD-AIM or ?? would be more suitable, if any at all are.

The Put would possibly solve one problem -- running out of cash for AIM Buys as the stock declines, as the Put would generate some on the stock price decline

And, again, volatility in the stock is needed, so that the AIM Buys and Sells within a range would offset the Put expiring worthless if the stock doesn't decline, or even rises.

Off the top of my head. Comments? Anyone played this?