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| Trading Simulator |
 Posted: Mon Apr 03, 2006 3:46 am Post subject: |
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Investing Sr. Associate
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One other coding "goodie" that I hope to apply this round, since it seems that the portfolio return % calculation is not going to be nearly as difficult as I was originally thinking... being able to combine sales of multiple holdings of one stock. This is another realistic feature, and one that will save you some e$ on commissions if you want to completely liquidate multiple open positions on the same stock.
No promises, but I'm looking at it.  |
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| Dave Rathbun |
| Posted: Wed Apr 05, 2006 9:36 pm Post subject: |
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CFO
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Okay, here's the long and short of it. First the bad news...
The background processes are still not running and will not be until after this weekend. This means that the active trader listing will not update, and the portfolio values and therefore your net worth will not be updated. That will all be fixed this weekend. So that's the bad news. Please do not post any more comments about your networth being wrong, your return being wrong... we know.  They'll be fixed very soon.
Now here's the good news. There is a new screen that you can use to view your complete portfolio status, including what I believe is a proper calculation of monthly return. There is no link on the menu yet, so bookmark this page:
http://www.einvesting.com/myreturn.php
That page is keyed to your account, so you're the only one that can see it. Or rather what I mean is that when you open that screen, you see your holdings, when I open it I see my holdings. No sneak peeks for this page either. 
So that's all that most of you will read. For those that are interested in more details, here they are. The screen currently consists of five sections, each of which plays a part in calculating the monthly return.
Open Positions from Prior Month
Your beginning portfolio value is determined by any positions that were open in your account at the end of the prior month. We now capture the stock price at that time, and determine each item's value. The sum of these becomes your base portfolio value. Note that there is no cash involved. In the prior system we captured only the total portfolio value, not the value of individual holdings. So this is the first improvement.
At the bottom of that section you will find the baseline value for your portfolio carried over from the prior month.
Trading Activities
This section will list each and every trade made this month. This section is used to determine the net amount of cash you put into the account, and the amount of cash from sales of stocks that is available for reinvesting. This is the most critical improvement, as you can now sell a position and reinvest it without affecting the baseline portfolio amount. Which will allow active traders to churn their funds and get a higher return than was possible under the prior system.
On this screen you will see a column called Monthly Deposits and Reinvest. Your portfolio starts the month with zero cash. If you buy something, then your baseline portfolio value is increased by the amount of new cash you invested. If you sell a position, the cash is available for reinvesting. Side note: this is all being done without storing any additional values in the database, or changing the order process. So the entire conversation about e$ versus t$ goes completely out of the window, nothing like that was done.
At the bottom of this screen you will see two important numbers... the net amount of new money that increased your portfolio baseline amount (if any) and the amount of cash from trades that may be reinvested during this month without causing an increase in the baseline amount.
Current Open Positions
This section shows your current open positions, some of which may be duplicated from the first section. The important new item here is the GTM or Gains This Month. This is the amount of return credited to your portfolio net gain for this month, which will be used to calculate your return. Note that when you first open a position your GTM will always be negative due to the commission for the trade.
Positions Closed This Month
This section lists any holdings that you sold this month. They also have a GTM which is based on the price you sold the stock for. Note that commissions are also paid on sales.
Take the GTM from Open Positions and add to the GTM from Closed Positions and you have your total GTM. From the first two sections we have determined the value of stocks from the beginning of the month, and we have determined how much "new money" in the form of e$ was added to your portfolio. So next...
Monthy Return Calculation
This section simply takes the numbers derived from the previous four sections, adds them up and does the division.
So that's it. This screen is available to you now, and you can open it and refresh it at any time. The montly return on that screen is "live" meaning it will be based on the active (yet still delayed) quotes from Yahoo. Ultimately we will have the logic from this screen converted to run in the background so we can update everyone's numbers as we did before.
I'm going to address one issue that I'm confident that someone will bring up, the handling for cash. Each month you start with zero cash in your portfolio. As you buy new positions without selling anything first, you are increasing the value of your portfolio, but also increasing the baseline used to calculate returns. This is not a problem, as far as I can see.
Take three scenarios:
Larry has 1000 in cash and no stocks
Curly has 500 in cash and 500 in stocks
Moe has 1000 in stocks
During the month Larry purchase 1000 in stocks. It went up to 1500. He started the month with a zero baseline, but deposited 1000, bringing his baseline to 1000. His return is 500 / 1000 or 50%.
Curly buys 500 worth of stocks. He had 500 in stocks already, but the new invested cash brings his total baseline to 1000. The two holdings each increase 250, giving him 1500 total value. His return? 50%. If he had not invested any cash, his return would have been 250 / 500 or still 50%. So investing cash does not reduce your return unless your new investment sucks.
Moe has 1000 in stocks. His portfolio baseline at the beginning of the month is 1000. He has no cash, so he simply watches his stock rise by 500. His return? 50%. Just like the others.
One final example: Ben had a great month last month, and he has stocks worth 10,000 and cash worth 10,000 in his "Reinvest" column. Remember that's not real money, the real money is in your e$ account, the Reinvest money is simply a calculated value for money that you can invest without increasing your baseline. You might want to argue that Ben should be able to carry that 10,000 over to the next month, and I will say "No, you don't have to do that." Here's why.
Suppose we do carry over the cash. Ben's portfolio baseline starting the month is 20K. Suppose his stocks (10K) go up 5K. The cash does nothing. His return is 25% because the cash is acting like a stock that improved 0% for the month, reducing his return. If we remove the cash, then he has a 50% return.
Now suppose that we remove the cash, giving Ben a baseline of 10K. The stock goes up 5K. But at the same time he invests the 10K in a stock, bringing his baseline value back up to 20K. But that stock sits there just like the cash, doing nothing. The return? 25%, just like the prior example.
So you can see that it's actually to your advantage to remove the cash from your portfolio each month. You can put it back anytime you want, and the baseline amount increases. But you don't get penalized for having a cash balance in your account that is not earning interest.
So there you have it, the new and improved monthly return calculation. Let the games begin. |
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| Benjamin |
| Posted: Thu Apr 06, 2006 4:03 am Post subject: |
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Administrator
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Excellent...I think the detail of this new screen is even more intuitive than professional brokers.
I hope you all enjoy! |
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| jdunn72 |
| Posted: Thu Apr 06, 2006 4:29 am Post subject: |
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Member of The Month
March
Joined: 26 Jan 2006
Posts: 1407
This Month: 0
11098.15 e$
Net worth: 11,098.15
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
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| Thats good work I really love the closed trades for the month and the this months returns section the (last two at the bottom). But I have to say altogether I really don't like it. I must see where I am up and down for the day in all my positions and not have to keep a record of where I was yesterday compared to today and pull out a pencil and do the math (the old portfolio has that) also, I like to see the overall percentage that the portfolio is up even including the prior month (the old portfolio has that also). I think it would fabulous if you just added the bottom two sections to the old layout and had a details link for all that other stuff. Thats my opinnion and I honestly don't know how I could see at a glance what the heck is going on pricewise at a given moment with this new interface, hopefully this is just going to be an addition and not a replacement. Keep up the good effort. |
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| Benjamin |
| Posted: Thu Apr 06, 2006 4:40 am Post subject: |
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Administrator
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I did kind of rush it to get it out there. There is definetly some formatting things we can work on.
The big deal here is the calculation method. The GTM (Gains this Month) and the dollars you have to reinvest.
NO LONGER if you are up 100% on a e$1000 investment and then add another e$1000 in new positions will your portfolio % drop to 50% because of the "New Money".
Dave put it in a good perspective last night...
If you have e$1000 and make 20 trades that net you e$50 each your raw portfolio return will be 100%. Which is correct. Of course minus commissions and your at 80%. Active traders are no longer penalized! |
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| Dave Rathbun |
| Posted: Thu Apr 06, 2006 4:43 am Post subject: |
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CFO
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| jdunn72 wrote: | | I must see where I am up and down for the day in all my positions and not have to keep a record of where I was yesterday compared to today and pull out a pencil and do the math (the old portfolio has that) also, I like to see the overall percentage that the portfolio is up even including the prior month (the old portfolio has that also). |
This is not a replacement for the portfolio screen.
| Quote: | | I think it would fabulous if you just added the bottom two sections to the old layout and had a details link for all that other stuff. |
Again, this is not a replacement for the old screen (which is still available under the link at the top of the page. Your trade history shows all closed trades. The portfolio screen currently linked will show your monthly return based on the calculations used by this screen, but only updated once an hour, or on whatever schedule we decide is appropriate. I don't envision taking any of the information from this new "return" screen and putting it on the portfolio screen.
This screen is completely optional, you never have to look at it if you don't want to. I wrote the screen to test the algorithm that will be used to calculate the monthly return, and I needed an easy way to see the results. It just seemed natural to turn it into a screen that others might use.
To repeat: the current portfolio and trade history screens are not being replaced, they will continue exactly as they are. I envision making a new link (or Benjamin will, actually) that gives you the option to review how your monthly return in detail is being calculated. Part of the problem before, in my opinion, was that people weren't sure what the numbers were, what they should be, or how things were being calculated. This screen is overwhelming because it has every piece of information needed to do the calculation, and it shows it to you at the lowest most specific possible level of detail.
| Quote: | | I honestly don't know how I could see at a glance what the heck is going on pricewise at a given moment with this new interface |
And we don't expect you to use this screen to do that.
| Quote: | | hopefully this is just going to be an addition and not a replacement. |
Correct. |
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| jdunn72 |
| Posted: Thu Apr 06, 2006 4:47 am Post subject: |
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Member of The Month
March
Joined: 26 Jan 2006
Posts: 1407
This Month: 0
11098.15 e$
Net worth: 11,098.15
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
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| Well, then this is very cool, I like it alot. |
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| Benjamin |
| Posted: Thu Apr 06, 2006 4:49 am Post subject: |
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Administrator
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| I modified my signature...I shouldn't say new portfolio. |
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| Dave Rathbun |
| Posted: Thu Apr 06, 2006 4:51 am Post subject: |
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CFO
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FWIW, there is still some fine-tuning that may be done. I discovered late last night after moving the code to the live site that I had left commission amounts out of the GTM calculations. If you start with zero, then your monthly return should match your portfolio return exactly, and it was not doing that. It does now.
I need to review some more scenarios and make sure that commission amounts are being handled as they should. |
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| jdunn72 |
| Posted: Thu Apr 06, 2006 4:52 am Post subject: |
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Member of The Month
March
Joined: 26 Jan 2006
Posts: 1407
This Month: 0
11098.15 e$
Net worth: 11,098.15
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
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| Dave Rathbun wrote: | | ...............Part of the problem before, in my opinion, was that people weren't sure what the numbers were, what they should be, or how things were being calculated. This screen is overwhelming because it has every piece of information needed to do the calculation, and it shows it to you at the lowest most specific possible level of detail. .............. |
I agree, this is great I really missed being able to see how my trade actually ended i.e., percent / dollars gained lost, and this does that and a whole lot more.
Thanks, this is adding much value to einvesting for all of us. |
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| InvestingMac |
| Posted: Thu Apr 06, 2006 4:52 am Post subject: |
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Investing Manager
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| I like it. I think it is really going to add something, and allow us to keep track of our portfolio's more accurately. |
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| Dave Rathbun |
| Posted: Thu Apr 06, 2006 4:53 am Post subject: |
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CFO
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| Benjamin wrote: | | I modified my signature...I shouldn't say new portfolio. |
Thanks, I was going to send you a PM about that. 
Here's an idea, how about if we make the "monthly return" number on the current portfolio screen clickable, and it takes you to this screen? Meaning you see a number, and you want a current (live) update, or you want to know where it's coming from, so you click it and this screen comes up. That would mean we don't have to create a new link in the header, which is already getting sort of busy. Thoughts? |
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| Benjamin |
| Posted: Thu Apr 06, 2006 4:54 am Post subject: |
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Administrator
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| This is better than Scottrades' Gainskeeper IMHO. |
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| Dave Rathbun |
| Posted: Thu Apr 06, 2006 4:57 am Post subject: |
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CFO
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| jdunn72 wrote: | | I really missed being able to see how my trade actually ended i.e., percent / dollars gained lost, and this does that and a whole lot more. |
I want to make sure that you realize that you have had that capability prior to this screen...
http://www.einvesting.com/tradehistory.php
When you view your portfolio there are some links at the bottom of the page. One of those is "Trade History". It shows you your closed positions from the beginning of time.
There is also the Order Queue screen which shows you details of the In and Out transactions. A portfolio holding contains both in and out information, or in the case of a partial sale the in and partial out. But I believe that any information that we had was already available, just not all in one HUGE screen like this one.
I'm not trying to be a pain, here, just want to make sure that everyone knows the tools that we've provided. If we need to make them more visible somehow, feedback is always good. |
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| Benjamin |
| Posted: Thu Apr 06, 2006 5:02 am Post subject: |
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Administrator
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| Dave Rathbun wrote: |
Here's an idea, how about if we make the "monthly return" number on the current portfolio screen clickable, and it takes you to this screen? Meaning you see a number, and you want a current (live) update, or you want to know where it's coming from, so you click it and this screen comes up. That would mean we don't have to create a new link in the header, which is already getting sort of busy. Thoughts? |
That sounds good, but maybe we should give it it's own link too. I'm not what exactly sure what to call it. Return Detail? Trading Complexities?  Umm, Portfolio Detail? |
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