Averaging Stock

[mohan1975]

Dear Speculators

Done investment in a stock and that went down around 50% Now I want to average the stock. Does anyone have sample excel for forcasting the number of stock and which level to be enter.

Thanks in advance for any help.

Regards,
Mohan1975

 

[fast_rizwaan]

Dear Speculators

Done investment in a stock and that went down around 50% Now I want to average the stock. Does anyone have sample excel for forcasting the number of stock and which level to be enter.

Thanks in advance for any help.

Regards,
Mohan1975

hi Mohan,

A. forecasting the number of stocks - how many stocks to be bought!
B. which level to enter - what price/percentage difference (50% or more) should be there to average existing holding? or are you asking "which nifty/sensex index level for buying?"

you need to answer the above, as your requirement is "unclear" with when to average and how much to purchase.

btw, buying 2 stocks for every 1 holding will bring average price very close to current price.

 

[mohan1975]

Hi ,

Thanks for the help.

I have attached a sample excel file. May be that could help you that what I am asking.

I know this is very simple question

Regards,
Mohan1975

 

[madhava36]

You are now holding 1400 shares @ Total cost of Rs.96165.875.The average cost is 96165.875/1400=Rs. 68.68991.Please note that Brokerage for selling is not taken into a/c.


madhava36

 

[yeshwantr]

hello all adsaaaaaaaaaaaaaaaaaa

 

[fast_rizwaan]

You just need the formula to average a list of shares:

let's try averaging 4 times a share:

1. 10@100
2. 20@90
3. 15@80
4. 12@70

here's the way:

1. calculate the total amount for all the shares:

total amount = (10*100)+(20*90)+(15*80)+(12*70)

2. calculate total shares

total shares = 10+20+15+12

3. Now we can calculate the average price:

Average of all the shares = Total amount / total shares

10*100+20*90+15*80+12*70 = 4840 <-total amount
10+20+15+12 = 57 <- total shares

Average = 4840/57 = 84

so, we have 57 shares @ 84 price.

 

[Arb888]

I find scaling into shares gives you a much better price that any given single entry or exit as you will never be able to consistently buy the bottom or top therefore an guaranteed average price will never give you a bad price

 

[columbus]

You just need the formula to average a list of shares:

let's try averaging 4 times a share:

.......so, we have 57 shares @ 84 price.

Personally I feel AVERAGING in INTRADAY is OK ,but over a period may good unless it is confirmed that we are at the bottom ALMOST.

 

[columbus]

You just need the formula to average a list of shares:

let's try averaging 4 times a share:

1. 10@100
2. 20@90
3. 15@80
4. 12@70

here's the way:

1. calculate the total amount for all the shares:

total amount = (10*100)+(20*90)+(15*80)+(12*70)

2. calculate total shares

total shares = 10+20+15+12

3. Now we can calculate the average price:

Average of all the shares = Total amount / total shares

10*100+20*90+15*80+12*70 = 4840 <-total amount
10+20+15+12 = 57 <- total shares

Average = 4840/57 = 84

so, we have 57 shares @ 84 price.

Averaging 3 or 4 times ,is ok,beyond this it won't be having significant
bearing ,if same number of quantity is assumed for all for ADDS.

Add.1 will have 50% impact (100/2) ,add.2 will have 33%(100/3) impact
add.3 will have 25% impact (100/4) etc..,so the impact keeps on
diminishing.

You will find the cumulative gain is coming down (top value in each column).
So you will find add.5 is useless.(No significant gain).So let us confine ourselves with 2 or 3 adds.

 

[d_s_ramesh]

Averaging a loser is like trying to catch a falling knife. Never average on down side, always have a policy to average on the upside.

HAving a stop level before entering a trade is most important in trading or investing.