TNA Trading Challenge

[userque]

according to robert, 'Point of Order: Infraction of the rules, or improper decorum in speaking. Must be raised immediately after the error is made.'

in order to avoid a 'point of order' motion, may i seek clarification of the rules before i break them?

today i was holding short, but sold the close for a long position. 1 transaction fee? and if i do nothing i am long for tomorrow?

may i choose to (before the open) sell my now long position at the open strike and goto cash, or goto back short only for the cost an additional transaction fee?

Your point of information is well taken.

Yes, there is a $5 fee when your position changes. Of course, there are three positions. You went from SHORT to LONG. Five bux was deducted from your balance at close.

"...and if i do nothing i am long for tomorrow?"

You are now LONG going INTO THE OPEN. That trade was made at the close today. Now, your only option is to make a trade between now and the open, that will execute at the open, establishing your position going INTO THE CLOSE...After the opening bell, your only option will be to make a trade (again, after the open) but before (or near) the close, that will execute at the close going INTO THE NEXT OPENING. I use CAPS to emphasize those phrases as that is the same language I use on the tally to describe the trades.

In other words:

For a trade to execute at the close, it should be posted near or before the close.
For a trade to execute at the open, it should be posted near or before the open.
Trades executed at the open define your position (from the open) going INTO THE CLOSE.
Trades executed at the close define your position (since the close) going INTO THE OPEN.

You are listed as being LONG going into the OPEN AND as being LONG going into the (following) close. However, If you go short at the open, then you will no longer be going LONG into the close. Since I don't know what anyone will do at the next day's open, I just label that position (going into the CLOSE) the same as the position going into the open. Even so, such changes are recorded in your transaction history, and that history is available to posted anytime you wish.

If you trade the open, it will be reflected in the numbers on the next tally. But the trade designations on the next tally will reflect the next day's action, not that day's action (the past).

You can always request that I post your individual trades/stats at anytime for clarity/verification/error checking, etc.

"may i choose to (before the open) sell my now long position at the open strike and goto cash, or goto back short only for the cost an additional transaction fee?"

You may. That's why I redesigned the whole spreadsheet; so you would be able to do just that--trade the open.

Are there any further points of information to The Chair?

 

[burrocrat]

yes, point of information...

 

[burrocrat]

re: transaction costs. i was short, i went long before yesterday's close. technically i made 2 transactions? (sold my short position (for cash) and simultaneously bought a long position (with cash) at the closing price? why not 2 transaction fees? and if i had sold the short position at closing (for cash snce we don't use clam shells as a medium of exchange anymore) and stayed cash then only 1 transaction fee? isn't that how it works in the real world?

re: trading the open. if i can simultaneously sell short/buy long at the close price, why can't i simultaneously sell long/buy short at the open price? why does it matter for how much time i have held previous position?

i am holding long going into the open. can't i sell that long which i already paid for (why does it matter when i paid for it i'm holding it right now) at the open price and instantly buy a short position at the open price? for 2 transaction fees on each turn? 2 last night short-cash-long, and 2 this morning long-cash-short? that is not how it works?

Your point of information is well taken.

Yes, there is a $5 fee when your position changes. Of course, there are three positions. You went from SHORT to LONG. Five bux was deducted from your balance at close.

"...and if i do nothing i am long for tomorrow?"

You are now LONG going INTO THE OPEN. That trade was made at the close today. Now, your only option is to make a trade between now and the open, that will execute at the open, establishing your position going INTO THE CLOSE...After the opening bell, your only option will be to make a trade (again, after the open) but before (or near) the close, that will execute at the close going INTO THE NEXT OPENING. I use CAPS to emphasize those phrases as that is the same language I use on the tally to describe the trades.

In other words:

For a trade to execute at the close, it should be posted near or before the close.
For a trade to execute at the open, it should be posted near or before the open.
Trades executed at the open define your position (from the open) going INTO THE CLOSE.
Trades executed at the close define your position (since the close) going INTO THE OPEN.

You are listed as being LONG going into the OPEN AND as being LONG going into the (following) close. However, If you go short at the open, then you will no longer be going LONG into the close. Since I don't know what anyone will do at the next day's open, I just label that position (going into the CLOSE) the same as the position going into the open. Even so, such changes are recorded in your transaction history, and that history is available to posted anytime you wish.

If you trade the open, it will be reflected in the numbers on the next tally. But the trade designations on the next tally will reflect the next day's action, not that day's action (the past).

You can always request that I post your individual trades/stats at anytime for clarity/verification/error checking, etc.

"may i choose to (before the open) sell my now long position at the open strike and goto cash, or goto back short only for the cost an additional transaction fee?"

You may. That's why I redesigned the whole spreadsheet; so you would be able to do just that--trade the open.

Are there any further points of information to The Chair?

 

[userque]

re: transaction costs. i was short, i went long before yesterday's close. technically i made 2 transactions? (sold my short position (for cash) and simultaneously bought a long position (with cash) at the closing price? why not 2 transaction fees? and if i had sold the short position at closing (for cash snce we don't use clam shells as a medium of exchange anymore) and stayed cash then only 1 transaction fee? isn't that how it works in the real world?

re: trading the open. if i can simultaneously sell short/buy long at the close price, why can't i simultaneously sell long/buy short at the open price? why does it matter for how much time i have held previous position?

i am holding long going into the open. can't i sell that long which i already paid for (why does it matter when i paid for it i'm holding it right now) at the open price and instantly buy a short position at the open price? for 2 transaction fees on each turn? 2 last night short-cash-long, and 2 this morning long-cash-short? that is not how it works?

Good questions:

You went short...a certain number of shares, the theoretical maximum number of shares you could afford. Let's say that number is 100 for the sake of discussion. You owned -100 shares. You then went long. So, in this simplified example, you would simply just buy 200 shares, in one transaction. That would put you at 100 shares to the long side.

re: trading the open. if i can simultaneously sell short/buy long at the close price, why can't i simultaneously sell long/buy short at the open price? why does it matter for how much time i have held previous position?

Absolutely you can sell at the open. You just have to post to that effect before the open. That would be your position going INTO THE CLOSE.

i am holding long going into the open. can't i sell that long which i already paid for (why does it matter when i paid for it i'm holding it right now) at the open price and instantly buy a short position at the open price? for 2 transaction fees on each turn? 2 last night short-cash-long, and 2 this morning long-cash-short? that is not how it works?

Absolutely you can sell at the open. You just have to post to that effect before the open. That would be your position going INTO THE CLOSE.

_______________

Maybe it would help to think of it this way: Time is always flowing and approaching one of these two points: either INTO THE CLOSE, or INTO THE OPEN. Even on Saturday, time is approach the OPEN (Monday's Open). After that OPEN, time is going towards the CLOSE.

You are always in a position: LONG, SHORT, CASH. So at any point in time, you are either LONG, SHORT, or CASH going either INTO THE CLOSE or INTO THE OPEN.

 

[userque]

TNA Trading Challenge Results for 09 JULY 2014!

 

[userque]

As discussed, added a percentage stat for the ratio of long profitable trades to total profitable trades. (From that, the short percentage can be calculated in one's head (to save space on the sheet).

Next, I think I'll add an indication of the recent daily percentage moves for TNA.

BTW: Things can be funny with computer programs, spreadsheets, and the like. That is why I spoke about making the changes over the weekend if necessary. Turns out, this simple modification caused a circular reference warning in excel. Easily resolved...just saying...I never assume 'simple' will actually be simple with spreadsheets, etc.

 

[Steiner]

userque,

I am following this thread with great interest but have a few questions. When I look at the spreadsheet you posted for today (July 9th), it shows you were short TNA for the day. However, TNA posted a gain of .19% (77.29/77.14) for today. I am sure I am missing something but if you are short a stock and the stock goes up it would seem as though you would loose for that day yet the spreadsheet shows you gaining by .59% for today. I'm not even sure where the .59% comes from. Any help would be appreciated.

Thanks..
Rick

 

[userque]

userque,

I am following this thread with great interest but have a few questions. When I look at the spreadsheet you posted for today (July 9th), it shows you were short TNA for the day. However, TNA posted a gain of .19% (77.29/77.14) for today. I am sure I am missing something but if you are short a stock and the stock goes up it would seem as though you would loose for that day yet the spreadsheet shows you gaining by .59% for today. I'm not even sure where the .59% comes from. Any help would be appreciated.

Thanks..
Rick

Thanks for the question Rick,

The spreadsheet tracks the percentage change from the previous close to today's open AND from today's open through to today's close. TNA gapped up. I lost money there. Then TNA decayed to close DOWN from where it opened (but still up overall). I gained some back there.

If you compare my balance from the last tally sheet, you'll see that I did indeed lose a little.

Seems like I should add a column to also indicate the overall gain/loss percentage for the day.

Let me know if you need further clarity.

 

[Steiner]

Thanks.... You simply have multiple columns that give you the ability to account for whether someone entered/exited at the close of the previous day or entered/exited at the open of the next day. Initially it was confusing but I think I have it now. I think the additional column for gain/loss for the day would be nice if you have room.

One other question, in the column "into next opening" the entry for you on the 9th shows "short". Am I correct in thinking that implies you will be short TNA tomorrow (10th)?

 

[userque]

Thanks.... You simply have multiple columns that give you the ability to account for whether someone entered/exited at the close of the previous day or entered/exited at the open of the next day. Initially it was confusing but I think I have it now. I think the additional column for gain/loss for the day would be nice if you have room.

One other question, in the column "into next opening" the entry for you on the 9th shows "short". Am I correct in thinking that implies you will be short TNA tomorrow (10th)?

Exactly! It was confusing for me too at first when I was trying to figure out how to make the sheet. Unfortunately, I've experimented with a few different formats, but this one seemed to be the lesser of the evils. (Plus, I didn't want to spend a month developing a super pretty score card.:blink

Right again! I'm short into the open. I don't expect to trade the open, so I'll likely still be short into the close as well.

 

[userque]

TNA Trading Challenge Results for 10 JULY 2014!


Rushed this updated sheet out today. Now shows Current and Previous Balances and Percentages.

UPDATED: Going to go over the sheet closely this weekend. I'm thinking my percentage change should be +3.16

 

[k0nkuzh0n]

Its quite possible I missed something, but it looks like your annualized rate of return is way off...

Did you start with $10k?
if so, youve made $1981.54... which is 1981.54/10000 = 0.198154 = 19.8154% so far.

You have 20 days in the challenge, so thats 19.8154%/20 = 0.99077% a day.

That extrapolated to 365 days would be 0.99077 * 365 = 361.6%, not even close to 2609%. 2609% means you're making 7% a day

 

[userque]

Its quite possible I missed something, but it looks like your annualized rate of return is way off...

Did you start with $10k?
if so, youve made $1981.54... which is 1981.54/10000 = 0.198154 = 19.8154% so far.

You have 20 days in the challenge, so thats 19.8154%/20 = 0.99077% a day.

That extrapolated to 365 days would be 0.99077 * 365 = 361.6%, not even close to 2609%. 2609% means you're making 7% a day

That's not how APR's are computed (nor compounded in reality). I'll post a reference website shortly.

 

[userque]

Its quite possible I missed something, but it looks like your annualized rate of return is way off...

Did you start with $10k?
if so, youve made $1981.54... which is 1981.54/10000 = 0.198154 = 19.8154% so far.

You have 20 days in the challenge, so thats 19.8154%/20 = 0.99077% a day.

That extrapolated to 365 days would be 0.99077 * 365 = 361.6%, not even close to 2609%. 2609% means you're making 7% a day

Yep, started with $10,000

Try this:

How to Annualize a Rate of Return | AllFinancialMatters

...

It’s a fairly simple calculation to perform as long as you have the following information:1. Number of days that have elapsed so far this year. This is easy to calculate if you have access to Excel.
2. The YTD return of the investment that you want to annualize.
The formula for annualizing a ROR is pretty straight forward:
[(1 + YTD ROR)[SUP]1/(#of days/365)[/SUP]] – 1

...

 

[userque]

Its quite possible I missed something, but it looks like your annualized rate of return is way off...

Did you start with $10k?
if so, youve made $1981.54... which is 1981.54/10000 = 0.198154 = 19.8154% so far.

You have 20 days in the challenge, so thats 19.8154%/20 = 0.99077% a day.

That extrapolated to 365 days would be 0.99077 * 365 = 361.6%, not even close to 2609%. 2609% means you're making 7% a day

[PLEASE SEE MY BELOW RESPONSE(S) AS WELL]

Since so many on these boards have difficulty with percentages, I did a show-you-better-than-I-can-tell-you type of thing. I ran your daily percentage calculation in a simulation spreadsheet to simulate your figure over 365 days. Here are the results:



Final after 365 days: $365,438.64

Even using your numbers, the answer is still well over 361%:
$365,438.64 / $10,000.00 = 36.54386415
convert to percent: 3654.386415 %

Since some readers may still not understand how the "convert to percent" works, I've simplified that as well through example:

If someone goes from $100 to $400, what is the percentage increase? Well, the gain is $300 (400-100). Then, as you did in your post, divide the gain by the initial value: 300/100. Or 3. But, that's not 3%! You have to multiply by 100 to get the percentage, or 300%!

So, using your slightly off numbers, I'm doing even better: 3,654.38%

I've attached the actual spreadsheet for verification or educational purposes, but here are the top and bottom clips of it:

If needed, I can try to explain it further:

UPDATE: I forgot to subtract the initial $10 grand from the final sum of $300 grand, doing that, the corrected APR (That your daily percentage would have yielded) is 3,554.38%!

 

[burrocrat]

i think there is something else wrong with your spreadsheet too, because my number is red, and it's supposed to be green. fix that will ya?

 

[userque]

i think there is something else wrong with your spreadsheet too, because my number is red, and it's supposed to be green. fix that will ya?

Are you sure the problem is the spreadsheet?

 

[k0nkuzh0n]

fair enough; Didn't realize the compounding made such a massive difference but it certainly makes sense at such high percentages.

Still don't think its useful tool to gauge performance tho. I think the volatility of day-to-day returns invalidates the mathematics.

 

[userque]

fair enough; Didn't realize the compounding made such a massive difference but it certainly makes sense at such high percentages.

Still don't think its useful tool to gauge performance tho. I think the volatility of day-to-day returns invalidates the mathematics.

lol, it's a great tool, that's why the industry uses it. The volatility comes from not having many days from which to calculate it. As time goes on, and approaches 365 days, it stabilizes more so.

So, basically, any measuring stick would be volatile with only a few days (20, in this case) of data. But it's the best ruler we've got.

Even so, everyone in the challenge is subject to the same exact volatility. soooo ... it is what it is.



ps..."invalidates the mathematics"???:blink: 1. Math is the universal language. It's the reason why we can communicate remotely like this.
2. What do you use whenever you find that Mathematics has been invalidated by your opinions?

 

[k0nkuzh0n]

lol, it's a great tool, that's why the industry uses it. The volatility comes from not having many days from which to calculate it. As time goes on, and approaches 365 days, it stabilizes more so.

So, basically, any measuring stick would be volatile with only a few days (20, in this case) of data. But it's the best ruler we've got.

Even so, everyone in the challenge is subject to the same exact volatility. soooo ... it is what it is.



ps..."invalidates the mathematics"???:blink: 1. Math is the universal language. It's the reason why we can communicate remotely like this.
2. What do you use whenever you find that Mathematics has been invalidated by your opinions?

If your comparison is accurate, I can stop here and you should be able to extrapolate the rest of my response :laugh: