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American Capital Agency Corp. Message Board

  • heibee1234 heibee1234 Mar 17, 2013 1:52 PM Flag


    Should I make a successful trade using the GLAD rules,if I purchase the minimum of 1000 shares, that gives me a trade of $100.00 - commissnions for a profit of about $80.00 . It's stated that a .10/trade is the goal (1000 x .10=100.00). Where am I wrong

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    • newport_beach_dreamin newport_beach_dreamin Mar 18, 2013 12:02 PM Flag


    • Doc,
      When is the exit of ARR? X+17?

    • Hey Heibee1234,

      Please put your question in context. There are 5 stocks that fit the GLAD/3% Rules. In my personal portfolio I purchased 5,000 shares of ARR last cycle on the 14th and 15th for 10,000 total at an avg of 6.65. I sold on X-1 for 6.75. That is 1,000 profit(10,000 x.10).

      I broke down the money management dynamics on a different thread. Obviously if you have a smaller account you should not trade this many shares. There will be some overlap between the times you own the 5 stocks, so as an example, I am allowing for two fills/cycle for PSEC, FSC, ARR and CFP. I am allowing three fills for MAIN. If we are at the maximum fill point following my example, I will have 10,000 shares of the 4 first stocks and 5,000 shares of MAIN.

      That will take an account size of approximately (110,000 x 5) or 550,000. Trading on margin will reduce this to approximately 300,000. I would recommend, if your account size is lower, that you do not trade all 5, or that you reduce the number of shares accordingly.

      This example of the 300,000 account size has historically(GLAD/3%) returned over 10,000/month or 120,000/year or 40% annually, less commission and margin debt interest expense.

      Does this explanation help?


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