Posts Tagged ‘strategie’

When to HOLD?

March 26th, 2010

CASE 2:

TICKER: MSFT (Microsoft Corp.)
DATE: 080207 (February 7th, 2008)
TIME: 14:15 (14 hours, 15 minutes)
PRICE: 30.07 (american dollars)
WINDOW: <1 H (1 hour or less)
PROB (+Y): 0.0518 (5% probability)
+YIELD: > 1.00 (Positive Target Yield Area)
PROB (-Y): 0.032 (3% probability)
-YIELD: < -1.00 (Negative Target Yield Area)
PROB (~Y): 0.9170 (92% probability)
~YIELD: 1.00/-1.00 (Inter Target Yield Area)

EST_YIELD: 0.02 (0.02% Opportunity Expected Yield)

Fact: MSFT ticker, on February 7th 2008, at 14:15 hours, is quoting at $30.07 price.

Opportunity: In less than 1 hour, has a 5% probability of over performing 1% yield, a 3% probability of under performing -1% yield, and a 92% probability of performing between 1% and -1% yield. The overall expected yield is 0.02%.

Recommended Action: HOLD.

Another example of “BUY”

March 26th, 2010

CASE 1:

TICKER= MMM (3m company)
DATE= 080221 (February 21th, 2008)
TIME= 10:10 (10 hours, 10 minutes)
PRICE= 78.51 (american dollars)
WINDOW= <1 H (1 hour or less)
PROB (+Y)= 0.8823 (88% probability)

+YIELD= > 1.00 (Positive Target Yield Area)
PROB (-Y)= 0.0501 (5% probability)
-YIELD= < -1.00 (Negative Target Yield Area)
PROB (~Y)v 0.0676 (7% probability)
~YIELD= 1.00/-1.00 (Inter Target Yield Area)
EST_YIELD= 0.83 (0.83% Opportunity Expected Yield)

Fact: MMM ticker, on February 21th 2008, at 10:10 hours, is quoting at $88.23 price.

Opportunity: In less than 1 hour, has an 88% probability of over performing 1% yield, a 5% probability of under performing -1% yield, and a 7% probability of performing between 1% and -1% yield. The overall expected yield is 0.83%.

Recommended Action: BUY.