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


To: THE FOX who wrote (8728)10/4/1999 3:39:00 PM
From: Bernie Goldberg  Read Replies (2) | Respond to of 18928
 
Hi,
You missed a minus sign which is very important. It was
-$12.
Lets say you bought 500 shares of XYZ at $10 per share
= $5000
Assume AIM directs you to sell 50 shares at $20 = $1000
Assume AIM directs you to sell 100 shares at $35 = $3,500
Assume AIM directs you to sell 75 shares at $38.5 = $2,888
You would have sold 225 shares and have 275 shares left. Since you received $7388 for the 225 shares you sold and you only paid $5000 for your original 500 shares you have a profit of $2388 on your original investment. One could say that you were paid $2388 for the shares that you haven't sold. $2388 divided by 275 is $8.68. Since this represents $$ that you have received and not money that you have paid, it is a negative. Therefore, the cost of those 275 shares is -$8.68. Hope this explains it.
Bernie



To: THE FOX who wrote (8728)10/4/1999 5:34:00 PM
From: Dataminer1  Read Replies (2) | Respond to of 18928
 
Hi Fox,

The current cost per share (still held) in the example is
MINUS $12.15 a share. This means you got all your initial investment back plus 12.15 for every share you still hold. (Converted it to cash).

Think of it like this. If you bought a stock that doubled, and sold 1/2, your current cost per share would be 0. If you bought a stock that quadrupled, and sold 1/2, you would have a negative cost per share (still held).

Hope this explains it a little better.

Regards,
D1