Possible to create instrument that trades like MA of a stock?

D

dalegrief

MA=Moving Average

Curious about this, would seem impossible, but maybe with options. Just wondering if anybody has ever heard of such a thing. thanks
 
Yes, buy the stock and it will follow the moving average of itself. If it does not, then the laws of nature have been suspended.

Duh.
 
What you need to do is buy x shares of the stock every day. Then your avg price will follow the moving avg.

What a brilliant idea.

Too bad its out in the public now, we could have sold it for millions.
 
No I'm not kidding - I'm curious what YOU think such a make believe instrument would buy you over trading the actual security (presumably ignoring that prices during the day fluctuate all over the map and aren't just the one price reflected by an N day moving average)?

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As far as simply buying X shares every day - that will give you an average price over all those days of buying, but not necessarily a moving average since you can't really just roll off those shares you bought Y days ago at the price you paid for them (which you'd need to do for your average cost to track the moving average as days pass).
 
You're right about stock777, that wouldn't give you anything close to what trades like the MA. Well PM me if you want. Its such a simple idea, but oneif it works would be incredibly profitable, just take a look at any chart with a short time frame ma and think about it.
 
Interesting idea, thinking outside the box which is great.

Do you mean a basket of securities that trades in a smooth parabolic fashion, like the shape of an MA?

...or do you literally mean to find a way to hedge or scale a position such that your synthetic security's value is equal to an MA of the underlying at all times?
 
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