If a stock drops to -2% (percent change) and then to +1% (percent change), have you then made 3% or 1% if you bought the stock at -2% (percent change)?
Answer in percent not price, please!
Answer in percent not price, please!
How would you solve this, especially when you know you are a guru?
- Thread starter Phill Twist
- Start date
Ambiguous question. The answer depends on your reference for price change.
If the described price changes are relative to a single price reference, such as the open, then the answer is +3.06% (2dp).
For the alternative answer the prior -2% change is irrelevant and so the answer is +1%.
What's the point in this question?
- not a guru
If the described price changes are relative to a single price reference, such as the open, then the answer is +3.06% (2dp).
For the alternative answer the prior -2% change is irrelevant and so the answer is +1%.
What's the point in this question?
- not a guru
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What's the selling price?
You don't make any money until you close the position.
But I guess you meant Unreal P/L following the 1% increase.
Why do you care about the 2% drop if you go long after it? The stock might have dropped 50% before you decide to buy it. So what's the point?
As JTrades was asking, what's the point to this question???
You don't make any money until you close the position.
But I guess you meant Unreal P/L following the 1% increase.
Why do you care about the 2% drop if you go long after it? The stock might have dropped 50% before you decide to buy it. So what's the point?
As JTrades was asking, what's the point to this question???
at the end of the day no pun intended, you've made 3%on your unleveraged capital, if you sold. somebody else who is assumed to have bought at the opening and sold made 1% on his capital.
it is all word play if you are dealing with hedge fund performance who try to put the best shine on performance.
here is a game played by individual investors. stock is at 100 pays $2 dividend for a 2% yield.
some investor who paid $10 for the stock says he can't sell because he is receiving a 20% return on the $2 dividend. therefore he refuses to reinvest because where is he going to receive a 20% dividend return.
that is how people think.
some investor who paid $10 for the stock says he can't sell because he is receiving a 20% return on the $2 dividend. therefore he refuses to reinvest because where is he going to receive a 20% dividend return.
that is how people think.
As an elite trader poster obviously I would have made 38%. Duh.
JTrades already answered this above well.. but I'm going to work through it with numbers.
So first we assume the stock price is $100... it drops 2%, so it is now $98, which is where we buy. The stock ends up 1%, so the value of the stock at the end of the day is $101. The price difference is $3, but since we bought at $98, we have actually made 3/98 = 3.06%.
So first we assume the stock price is $100... it drops 2%, so it is now $98, which is where we buy. The stock ends up 1%, so the value of the stock at the end of the day is $101. The price difference is $3, but since we bought at $98, we have actually made 3/98 = 3.06%.
3/98 it is. This is 7th grade algebra. Not sure why we need a "guru" to solve this problem.