Formulae to simulate earnings/losses of a volatile stock

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Formulae to simulate earnings/losses of a volatile stock

Postby okjhum » Mon May 03, 2021 2:23 pm

Maybe I used the wrong search words, but I couldn't find anything on this. Pls excuse non-native English; hope you can understand my question:

I would like some formulae to simulate what would happen with the long-term accumulated earnings or losses with a volatile stock if I say I want my worth of shares at each point in time to stay constant at e.g. $10,000 plus/minus some suitable percentage, while the share price is going up and down.
Thus whenever the share rises above +x% I must sell off some, and when it falls below -y% I must buy some more, to make the total value stay roughly constant.
Including commission fees and capital gain tax, of course.

I guess this is similar to what S&P 500 uses to keep each stock at a roughly constant percentage, but I want a roughly constant value.

Surely, such calculations already exist, although I couldn't find them. To be honest, I think I should expect it to be better to just leave all the shares untouched for ten years or so. :-) Or would indeed "constancy trading" be better in the long run? Whatever that may be, I'd still like to find the formulae for the beauty of formulae as such. ;-)
Thanks in advance!
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Re: stock calculations

Postby FJCC » Mon May 03, 2021 5:41 pm

There is no built in way to do such a calculation in Calc. It would be very complicated in order to account for different models of volatility, trading costs, tax laws, and trade thresholds.
I also do not see the point of the strategy. If you want the value of the investment to be constant, leave the money in cash. I am missing where the profit comes from.
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Re: stock calculations

Postby RusselB » Mon May 03, 2021 6:48 pm

These calculations do exist, and they are used by stock brokers, but they are far from simple.
The financial functions in Calc can do this, but there is a lot of viability in working with stocks that Calc just isn't setup to handle.
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Re: Stock calculations

Postby okjhum » Tue May 04, 2021 6:10 pm

Thanks for the answers. At least it's a relief to see that it's not just that I'm too dumb to find the algorithms by myself. ;-)
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