Wednesday, February 18, 2009

Position Sizing

The reason why the P&L for trades taken is in absolute amounts, rather than % is due to the minimum bid structure in SGX

For <$1, 0.005 per bid
For >$1, 0.01 per bid
For >$10, 0.02 per bid

Which means if % is used for calculating between $3 stock and a $1, P&L will be skewed towards $1stock if I gain/lose 0.10each for both counters.

Given P&L in absolute amounts, whether your entry size is 10lots or 2 lots, the results will be easily compared. But there is slight note to be taken especially comparing results <$1 and >$1

No comments: