Complex BUY SELL Order

[garilou]

We just received a complex BUY and SELL order like this week-end:

Ultimate Price Momentum v2

Opération             Symbole (Ticker)        Nom (Name)
Acheter  Buy         HYG.TO                    Hydrogenics Corp
Acheter  Buy         YGA.TO                    Gastar Exploration Ltd.
Vendre   Sell         HLB.TO                     Hillsborough Resources
Vendre   Sell         ONR.TO                    Open Range Energy Corp.
Vendre   Sell         WPT.TO                    Westport Innovations Inc.

As for now, the UPM v2 contains 4 stock:

WTN.TO
HLB.TO
ONR.TO
WPT.TO

After the discussion we had in topic:
http://www.superstockpicker.com/forum/index.php?topic=619.0

I understood that once HLB, ONR and WPT were sold, we should reallocate the total value of our portfolio according to the weights as posted on the web site, between WNT, HYG and YGA.

But as of tonight (July 27) HYG and YGA are not yet bought, and therefore not posted on the Ultimate Price Momentum v2 page, and I guess they won't be till tomorrow(Monday July 28) some time in the evening.

Should we first sell the 3 stocks, and wait for the next day to buy HYG and YGA?

Let me guess: if I want to do all transactions in the same day, I should assume that the performance is 0 and therefore the weight is 1.

Am I right?
Louise

[Super Stock Picker]

Hello,

Indeed, the new stocks are not posted yet on the site, except on the historical orders page as buys for today.
And when they'll be listed in the portfolio tonight, their performances will show a 0% return as fresh buys at close price.

So, for your allocation, you were right when thinking to weight the new stocks as 1 in the formula. Then, you can do all your transaction the same day.

[garilou]

Hello again,

So, for your allocation, you were right when thinking to weight the new stocks as 1 in the formula. Then, you can do all your transaction the same day.

While preparing my new spreadsheet, I had to think about that question again:
Sure we can do all transactions in the same day.
But let's say I receive your BUY and SELL recommendations at night, and want to place my orders at night (maybe because I work during market opening hours,)

If we keep in mind that all the money of the portfolio should be invested, in real life, I do not know how much income the sales will produce, so it becomes hard to precisely compute how many shares of the new stocks to buy.

Ideally, should it not be better first to sell (as in this example) HLB, ONR and  WPT, and then, knowing exactly the total amount of money available, compute how many shares of HYG and of YGA to buy?

I guess the 2 operations could be done over a 2 days period too.

Which is better? Place all orders at the same time, or first sell and then buy?

Louise

[dhamel]

If you look at my spreadsheet it will compute that.

I work with BMO Investorline, and I used to put all my order saturday morning.

They execute all the sell and then all the Buy.   YEs sometime there is some difference in the price that I had assume.  BUt not that much.

I am sometime under loan with them for small amount, they even let it go in the RRSP account.

One thing that my spreadsheet does is to round to the lowest 100 lots.   So you always buy less share than you could anyway.

[garilou]

If you look at my spreadsheet it will compute that.

Yes, I've looked at your spreadsheet.
This means that you are like me, you do not like odd lots! (This should be a new topic I know)
In mine (that way not finished), I tend to round up the stocks that have a higher SSP weight, and vice-versa.     

They execute all the sell and then all the Buy.

That is interesting.
I guess this means that you give your orders to the market.
I rarely place my orders to the market. (This also should be another topic.)
I very rarely give an order to the market, unless I'm right in front of my computer, prepare the order, check the quotes every 2 seconds, and then click and send my order.

Most of the time, I set a limit price, and then I place the order for a few days, and change it if I feel necessary.
In that case, the orders won't be executed in the order you said: first the sells and then the buys.
I guess it depends what margin you have.

I am very surprised to read that you can buy in and RRSP if the funds are not all there to cover.

Maybe I am too conservative, I have never tried: I always keep some extra cash in my RRSP.

Since you usually have 5 days to settle, don't they ask you to bring in the amount needed before 5 days?


Louise

PS: Dommage que nous devions nous parler anglais ici 
 

[dhamel]

I dont feel that placing the order @ Market is a problem given that we are looking for huge move.   If we were day trading that would be an issue.

Yes I quite often have a negative balance in my RRSP account, from 0 to 2000 in a 100K account.  They are not complaining.