90 shares @ $31.00 = $2,790
70 shares @ $24.00 = $1,680
Total is 160 shares for $4,470
At what price do I sell to break-even?
I worked it out to be about $27.94?!
beamstas
10th-July-2009, 10:07 PM
90 shares @ $31.00 = $2,790
70 shares @ $24.00 = $1,680
Total is 160 shares for $4,470
At what price do I sell to break-even?
I worked it out to be about $27.94?!
Correct
insider
10th-July-2009, 10:10 PM
Incorrect... You need to factor in your trading expenses too... Buy, buy and sell
bonkerrs
10th-July-2009, 10:13 PM
Correct
OK, if we forget about the trading expenses for now. What is the formula to work this work? I thought it was the average price.
beamstas
10th-July-2009, 10:21 PM
OK, if we forget about the trading expenses for now. What is the formula to work this work? I thought it was the average price.
Total Cost
Divided by no of shares
bonkerrs
10th-July-2009, 10:24 PM
Total Cost
Divided by no of shares
Brad, thanks! Think I'm looking too hard :o Big Friday night for me... lookng at calculations.
skc
10th-July-2009, 11:33 PM
The level of intellectuality on display here... just astonishing.
BTW, are you averaging down or pyrmiding up?
beamstas
10th-July-2009, 11:35 PM
The level of intellectuality on display here... just astonishing.
That was a compliment. Im 100% sure of it :)
springhill
10th-July-2009, 11:43 PM
The level of intellectuality on display here... just astonishing.
BTW, are you averaging down or pyrmiding up?
Intellectuality???? Krudd is that you? :D
bonkerrs
10th-July-2009, 11:49 PM
That was a compliment. Im 100% sure of it :)
A little harsh... but I guess I had it coming :)
jono1887
11th-July-2009, 12:55 AM
OK, if we forget about the trading expenses for now. What is the formula to work this work? I thought it was the average price.
average price only works if you bought the same amount of shares each time.
nunthewiser
11th-July-2009, 12:57 AM
average price only works if you bought the same amount of shares each time.
wrong
read beamstas post
skyQuake
11th-July-2009, 09:58 AM
Light intellectual banter incredibly difficult after a few schooners I see :p:
nathanblack
11th-July-2009, 11:15 AM
average price only works if you bought the same amount of shares each time.
Agreed...If you dont want to use a calculator.
jono1887
11th-July-2009, 11:29 AM
wrong
read beamstas post
Beamstas is correct... but my statement is not wrong.
If you bought the same no. of shares each time... then the average price is sufficient (when not taking into account brokerage)
nomore4s
11th-July-2009, 11:43 AM
average price only works if you bought the same amount of shares each time.
Beamstas is correct... but my statement is not wrong.
If you bought the same no. of shares each time... then the average price is sufficient (when not taking into account brokerage)
What are you talking about? What does it matter how many shares you brought each time?
100 @ $1.50 = $150
100 @ $0.50 = $50
= $200 for 200 = $1.00 each ave price.
150 @ $1.10 = $165
50 @ $0.70 = $35
= $200 for 200 = $1.00 each ave price.
Timmy
11th-July-2009, 11:56 AM
Hi guys, this is a really basic spreadsheet to help you work out your average entry price. Doesn't include brokerage or any other costs, but by all means have a play with it to include these if you see fit.
Will work with Excel & Open Office, and I think Google docs (though I haven't used it with Google docs).
Enter the details of the number of shares bought and the price paid in the yellow cells, other cells should calculate automatically for you.
I hope it is helpful.
jono1887
11th-July-2009, 12:00 PM
What are you talking about? What does it matter how many shares you brought each time?
100 @ $1.50 = $150
100 @ $0.50 = $50
= $200 for 200 = $1.00 each ave price.
150 @ $1.10 = $165
50 @ $0.70 = $35
= $200 for 200 = $1.00 each ave price.
I was making a comment on using averages. for your second example, if you were to use averages - the average price would not work as you have purchased a different number of shares each time. The average price is $0.9 - I have no idea how you obtained $1.00 from getting the average.
If you remember from HS, average is the sum or the 2 prices divided by 2. The method you used - which is correct when you have different no. of shares is not a calculation of average price.
nomore4s
11th-July-2009, 12:17 PM
I was making a comment on using averages. for your second example, if you were to use averages - the average price would not work as you have purchased a different number of shares each time. The average price is $0.9 - I have no idea how you obtained $1.00 from getting the average.
If you remember from HS, average is the sum or the 2 prices divided by 2. The method you used - which is correct when you have different no. of shares is not a calculation of average price.
Mate, you can't use that formula to work out your average price. We'll try again.
This is what you are doing:
$1.10 + $0.70 = $1.80 / 2 = $0.90
But this is incorrect because - $0.90 x 200 = $180 but the shares have cost you $200. If you work out your ave price like this you will falsify your results.
To get your average price you divide the total cost by the total number of shares not the sum of the purchase prices divided by the number of parcels brought.
Timmy
11th-July-2009, 12:19 PM
At what price do I sell to break-even?
Jone, read the clue in the OP
jono1887
11th-July-2009, 12:30 PM
Mate, you can't use that formula to work out your average price. We'll try again.
This is what you are doing:
$1.10 + $0.70 = $1.80 / 2 = $0.90
But this is incorrect because - $0.90 x 200 = $180 but the shares have cost you $200. If you work out your ave price like this you will falsify your results.
To get your average price you divide the total cost by the total number of shares not the sum of the purchase prices divided by the number of parcels brought.
If you read my initial post, it says - averaging the price only works if the no. of shares bought each time is the same. My statement is correct.
I am not disputing the fact that if you have purchased different number of shares that your method is correct.
nomore4s
11th-July-2009, 12:34 PM
If you read my initial post, it says - averaging the price only works if the no. of shares bought each time is the same. My statement is correct.
I am not disputing the fact that if you have purchased different number of shares that your method is correct.
But why would you ever need to average the price like that? And that wasn't what the OP was asking, he wanted to know his breakeven price.
skc
11th-July-2009, 01:02 PM
If you read my initial post, it says - averaging the price only works if the no. of shares bought each time is the same. My statement is correct.
I am not disputing the fact that if you have purchased different number of shares that your method is correct.
Jono you have managed to bring the level of intellectuality to yet another level.
* picks up jaw from the floor *
You are confusing the term average price. "Average price" does not mean (to most people anyway) averaging the price. What you are doing is averaging the price (over the number of transaction) and that will equal the "average price" only if you bought the same number of shares.
what jono said is correct, his method works for the situation that both parcels are the same size. also he said it wouldnt work in cases that the parcel are diferent size...also correct.
although what he said is correct, i guess it means his formula is basically useless in 99% of cases. where as the other method is useful 100% of time.
correct me if im wrong, but i think jono is discussing the difference between average and weighted average. for the OP he needs to use weighted average(buying alot of shares at 1price will greatly effect your average).
nomore4s
11th-July-2009, 01:32 PM
correct me if im wrong, but i think jono is discussing the difference between average and weighted average.
When would you ever use the average like that though?
nathanblack
11th-July-2009, 01:36 PM
When would you ever use the average like that though?
in the 1 case he said it would work, ie both parcels are same size. i know its pointless, you know its pointless, im beginning to think jono knows its pointless? but it WILL work in that instance, which is all he claimed.
and when you look at the market, its all about price/volume. price alone is useless if volume is 1 share. but his definition of average is correct, there are man averages, mean, weighted, etc.
weighted is all we ever care about
cheers
beamstas
11th-July-2009, 01:53 PM
mind = blown
nathanblack
11th-July-2009, 02:20 PM
mind = blown
maybe you need to eat lunch?
beamstas
11th-July-2009, 02:22 PM
maybe you need to eat lunch?
Just cant come to terms with how some people can't grasp such a simple concept
beerwm
11th-July-2009, 02:41 PM
can someone explain it to me again?
... this is hard stuff
nathanblack
11th-July-2009, 02:49 PM
can someone explain it to me again?
... this is hard stuff
i like your humour. we can hope jono is just taking the pi$$ out of us, or he is a math geek?
jono1887
11th-July-2009, 03:17 PM
i like your humour. we can hope jono is just taking the pi$$ out of us, or he is a math geek?
hahaha... this has been quite humorous... yes, i must admit I did do 4U maths, although that is irrelevant as all we're discussing is averages :p:
cuttlefish
11th-July-2009, 03:47 PM
This whole thread has to be a gee up ... surely.
skc
11th-July-2009, 05:55 PM
I have spotted a market opportunity. I am going to write a computer program that will work out the average price of share transactions in ALL situations. There is clearly a need for such a tool in the trading community.
I know it's a big and ambitious project, but I think I can do it in about 3 years.
Look out for the BETA version that I will release in 12 months time. Welcome any feedback.
nathanblack
11th-July-2009, 07:07 PM
I have spotted a market opportunity. I am going to write a computer program that will work out the average price of share transactions in ALL situations. There is clearly a need for such a tool in the trading community.
I know it's a big and ambitious project, but I think I can do it in about 3 years.
Look out for the BETA version that I will release in 12 months time. Welcome any feedback.
My only concern is that in the 3yrs it takes you to develop the prgram, the way we calculate averages may change.
Perhaps rush it to market by simplifying the program to calculate average only when parcels are same size?
Then as a premium add-on, release the version that calculates average under all circumstances.
Overall you have a great idea, and if marketed correctly jono may buy it.
Timmy
11th-July-2009, 07:09 PM
I have spotted a market opportunity. I am going to write a computer program that will work out the average price of share transactions in ALL situations. There is clearly a need for such a tool in the trading community.
I know it's a big and ambitious project, but I think I can do it in about 3 years.
Look out for the BETA version that I will release in 12 months time. Welcome any feedback.
If I see any of my spreadsheet in it I WILL take legal action. I am planning on selling it to Goldman Sachs.
beamstas
11th-July-2009, 07:10 PM
I have spotted a market opportunity. I am going to write a computer program that will work out the average price of share transactions in ALL situations. There is clearly a need for such a tool in the trading community.
I know it's a big and ambitious project, but I think I can do it in about 3 years.
Look out for the BETA version that I will release in 12 months time. Welcome any feedback.
These exist.
beerwm
11th-July-2009, 07:22 PM
vote +1
for sticky thread
wayneL
11th-July-2009, 07:32 PM
Some good candidates for Federal Treasurer here. :eek7:
:eek::eek:
nathanblack
11th-July-2009, 07:59 PM
Some good candidates for Federal Treasurer here. :eek7:
:eek::eek:
Yes, i can see krudd announcing average australian earns $2mil a year.
Evidence:CBA CEO earns $4mil and coles saleslady earns $30k. approx average $2mil, there for as average australian i must be earning $2mil.
or price of petrol was $.80 fifteen years ago and $1.20 now, so average price is $1 a litre.
pollies will have a field day.
jono1887
12th-July-2009, 12:04 AM
Yes, i can see krudd announcing average australian earns $2mil a year.
Evidence:CBA CEO earns $4mil and coles saleslady earns $30k. approx average $2mil, there for as average australian i must be earning $2mil.
or price of petrol was $.80 fifteen years ago and $1.20 now, so average price is $1 a litre.
pollies will have a field day.
Sorry, but your mistaken... if you did read my post, it did state that the average only works when you have the same no. of shares for each purchase. In this case, there are not the same number of coles workers to CBA CEOs, hence it wouldn;t work...
However, you are still wrong anyway, the average australian would be earning $2.015Mil!! Go back to school... or learn how to use a calculator :p:
beerwm
12th-July-2009, 12:24 AM
Sorry, but your mistaken... if you did read my post, it did state that the average only works when you have the same no. of shares for each purchase. In this case, there are not the same number of coles workers to CBA CEOs, hence it wouldn;t work...
However, you are still wrong anyway, the average australian would be earning $2.015Mil!! Go back to school... or learn how to use a calculator :p:
just let this thread die already..
bump!
:)
nathanblack
12th-July-2009, 11:42 AM
Yes, i can see krudd announcing average australian earns $2mil a year.
Evidence:CBA CEO earns $4mil and coles saleslady earns $30k. approx average $2mil, there for as average australian i must be earning $2mil.
or price of petrol was $.80 fifteen years ago and $1.20 now, so average price is $1 a litre.
