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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: HighTech who wrote (8554)	9/20/1999 1:45:00 AM
From: Sbtorres	Read Replies (3) \| Respond to of 18928

AIM explained ;-) Think of a frame in the shape of a less than sign '<' where the vertex is the midpoint, the upper end point is the sell price, lower end point as the buy price which can be precalculated. The midpoint is calculated as Pc/N where Pc is the portfolio control and N is the current number of shares. Pc/N = 5000/250 = 20 After the first sell of n shares, the whole frame is shifted up where the midpoint is now PC/(N-n). The buy price is also shifted up although Pc stays the same since it is still a sell. N = N - n = 250 - 82 = 168 Pc/N = 5000/168 = 29.8 After a buy of n shares, changes the number of shares and the portfolio control. N = N + n = 168 + 53 = 221 and Pc = Pc + 1/2 V = 5000 + 1/2(2153) = 5556 where V is the proceeds from the buy transaction. The midpoint is now at 25 and so on. Portfolio Control serves as a reference in AIM. This shows that after the first sell, the midpoint as well as the buy price was shifted up by almost 10 points and yet Pc did not change.