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MY BEAR FORMULA
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vestor
#41 Posted : Friday, July 22, 2011 10:42:37 AM
Rank: Member


Joined: 11/9/2010
Posts: 132
@ lovely, That is true, a case in point is C&G, I managed to sell a few at 49 after book closure. quote=lovely2010]
vestor wrote:
@ Lovely, in your bonus formula, you will sell before closing date and therefore these shares will not attract bonus shares. What I was thinking is that you sell the shares and give yourself bonus shares by buying more share with the proceeds when the price drops, you can end up getting more bonus shares than what the company gives. e.g if the company gives 10% bonus, you sell before closure date and after the price drops, it may drop by more than 10 %, then you buy again. In theory you will get extra bonus shares.


You are right by the way...I had a wrong calculation, you make sense, point taken. But there is a possibility of selling @ a good price lets say on coming monday. If you sell on Monday and not Friday you are guaranteed a bonus and the prices wont be so bad compared if you wait longer. What do you think?[/quote]
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lovely2010
#42 Posted : Friday, July 22, 2011 10:49:06 AM
Rank: Member


Joined: 10/25/2010
Posts: 519
Location: nairobi
lovely2010 wrote:
lovely2010 wrote:
My third formula is escaping settlement period. I will use three examples:

1 Bonus shares

2 While averaging down

3 My short selling formula

These formulas make more sense when doing it practically than me putting them down here.

1 Bonus share

With bonus share I use what Aguytrying did but I will use example of icdc coz books are being closed today.

Lets say you have 2900 shares of icdc and you want the bonus. Since the ratio is 1:10 you'll get 290 bonus shares. Why not sell 290 from the existing shares @ a good price before book closure. You could have sold them last week or today coz Im sure come Monday, things wont be rosy for this counter. 200 you'll sell them as normal shares 90 as odd shares. Im very sure by the time they post those bonus to our cds plus 3 days settlement period, we will be below price of 20. Tell me what you think.


Guys, let me correct myself on this...thanks to @vestor. I think it will make more sense to sell the 290 shares on Monday than Friday, coz if you sell them on Friday you will not get the bonus share. But further waiting past Monday, things might get worse.


Let me do it mathematically, might be easier...I think if you sell the 290 bonus on Friday...You will stand a chance of selling @ a good price but you will receive less shares after book closure. ie 2900/10=290 if I sell them on Friday the calculation will be 2900-290/10=261
290-261=29 This means you will have less 29 shares if you sell on Friday but you will sell @ a good price. If you sell on Monday you will get 2900/10=290shares but you will sell @ a lower price...what do you think?
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lovely2010
#43 Posted : Friday, July 22, 2011 11:54:28 AM
Rank: Member


Joined: 10/25/2010
Posts: 519
Location: nairobi
I wish to give this formula sometime to see if it will be worth to sell expected bonus today on Friday 22 which means short sell 290 bonus share but you will receive 261bonus after book closure using todays prices. Or is it worth it to short sell on Monday 290 bonus shares to sell using mondays prices but you will receive exactly 290. Or is it worth it to sell on the day they will be deposited into cds plus 3 settlement period. Using that day prices.

We can move to No. 2 later while I work on this one...
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lovely2010
#44 Posted : Sunday, July 24, 2011 10:25:25 AM
Rank: Member


Joined: 10/25/2010
Posts: 519
Location: nairobi
I will work on short selling bonus shares if you sold them on Friday and what you would have made.

icdc 2900/10=290bonus shares

But since you sold before book closure if you sell the 290 bonus share, when the bonus is being issued you will get 2871 total shares of icdc instead of 2900 ie

2900/10=290
2900-290=2610/10=261
290-261=29

200 I will sell using the normal price used on friday 21.50 and 90 I will sell using the possible odd share price used on friday 20

200*21.5=4300*2.1/100=90.3
4300-90.3-2stamp=4207.7

90*20=1800*2.1/100=37.8
1800-37.8-2stamp=1760.2

4207.7+1760.2=5967.9

If you sold 290 bonus shares on Friday you would have made 5967.9 but with less 29 shares on the normal 2900 shares you had because you sold before book closure. hence

I was asking myself, is there a possibility of getting 2900 shares instead of 2871? I was thinking if you sold 261 bonus shares instead of 290 this might be achieved, hence you still remain with your 2900 instead of 2871 thats less 29 shares...Guys, I really need your heads here...

The maths will be different though

icdc2900-261 bonus shares=2639/10=263.9

263.9+2639=2902icdc shares

So I will use Fridays prices
200 I will sell as normal 61 as odd

200*21.50=4300*2.1/100=90.3
4300-90.3-2stamp=4207.7

61*20=1220*2.1/100=25.62
1220-25.62-2stamp=1192.38

4207.7+1192.38=5400.08

If I use the first formula I will make Ksh5967.9
but I will get 29 less shares when my bonus is posted into my cds hence 2871 shares instead of 2900 shares
If I use the second formula I will make Ksh5400.08 but I will get my 2902 shares. This means, i got less money, but I got my exactly shares 2900, infact with extra 2 shares

Its up to you which formula you want to choose...Guys maybe you do the maths for me and tell me which one you think its better...I cant think at the moment...
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lovely2010
#45 Posted : Sunday, July 24, 2011 11:48:07 PM
Rank: Member


Joined: 10/25/2010
Posts: 519
Location: nairobi
BUYING AND SELLING SAME DAY

I will assume you bought NIC in 2007 @ Ksh. 60
Lets say you had Ksh60000 to invest. You also sold the shares @ a loss ie Ksh42
This means Ksh 18 loss for every share

Come Thursday 21st 2011 you decided to do something about it. You wanted to buy and sell on the same day...How will you achieve this? How much will you make? By how much will you have reduced your losses?

On thursday the share traded between Ksh36.75 to Ksh40



60000*2.1/100=1260
60000-1260=58740/60=979shares

979*42=41118*2.1/100=863.4
41118-863.4=40254.5

First loss 60000-40254.5=19745
Money needed to recover for selling @42=19745


To achieve this, I will sell half the shares and keep half,
979/2=489 shares or
40254.5/2=2012782.1/100=422.6
20127-423=19704/36.75=536 shares

If I am to sell same day @40
536*40=21440*2.1/100=450
21440-450=20989
20989-20127=862
Profit made after buying and selling same day is 862
or 20989+20127=41116
60000-41116=18884
19745-18884=861
or
41116-40254.5=861.5

End of my Formula

This is an additional info...if you bought the shares in 2007, you already have 3* bonus hence the losses you have for this counter are very minimal even if you decided not to take action. But further waiting could make things worse coz we are in bear market.
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lovely2010
#46 Posted : Monday, July 25, 2011 10:31:18 AM
Rank: Member


Joined: 10/25/2010
Posts: 519
Location: nairobi
Demand for ICDC today is @ 19...I think I would have preffered to sell less 29 shares on Friday @ 21.50 than Today...or later...
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pesh cash
#47 Posted : Wednesday, August 03, 2011 11:36:35 AM
Rank: New-farer


Joined: 6/1/2011
Posts: 47
Location: Nairobi
lovely2010 wrote:
BUYING AND SELLING SAME DAY

I will assume you bought NIC in 2007 @ Ksh. 60
Lets say you had Ksh60000 to invest. You also sold the shares @ a loss ie Ksh42
This means Ksh 18 loss for every share

Come Thursday 21st 2011 you decided to do something about it. You wanted to buy and sell on the same day...How will you achieve this? How much will you make? By how much will you have reduced your losses?

On thursday the share traded between Ksh36.75 to Ksh40



60000*2.1/100=1260
60000-1260=58740/60=979shares

979*42=41118*2.1/100=863.4
41118-863.4=40254.5

First loss 60000-40254.5=19745
Money needed to recover for selling @42=19745


To achieve this, I will sell half the shares and keep half,
979/2=489 shares or
40254.5/2=2012782.1/100=422.6
20127-423=19704/36.75=536 shares

If I am to sell same day @40
536*40=21440*2.1/100=450
21440-450=20989
20989-20127=862
Profit made after buying and selling same day is 862
or 20989+20127=41116
60000-41116=18884
19745-18884=861
or
41116-40254.5=861.5

End of my Formula

This is an additional info...if you bought the shares in 2007, you already have 3* bonus hence the losses you have for this counter are very minimal even if you decided not to take action. But further waiting could make things worse coz we are in bear market.



thanks for sharing this info! really informative thread.

the first formula for short selling will help me alot. i had really kwamad with some kengen for a while, been trying to average down but this is better.

buying and selling same day.... i like. i have an appetite for risk. which broker can do this? i work with faida who i don't think can work this magic based on past experience of them taking so long to sell or buy....maybe it was an issue of demand /supply but i think without a reliable broker, buying and selling same day can easily take you further south.

good work on this thread.
any recommendations?
I am an optimist. It does not seem too much use being anything else. ~Winston Churchill
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ralp_mutu
#48 Posted : Thursday, September 20, 2012 10:08:49 AM
Rank: Member


Joined: 3/26/2012
Posts: 232
Location: Nairobi
Applause Applause Informative Applause Applause
My folks told me that my very first word was 'billionaire'
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