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How are Prices for Transactions Established?

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Q: How are Prices for Transactions Established?

A: We use a calculation derived from academic research that estimates a statistically accurate mid-day price for ETFs.

Log-in to your Member's Menu/Home Page from the Login link ('PREMIUM LOG-IN/MENU') in the black menu bar near the top of any page of the site;

 

ETFOptimize Transaction Prices: Prices for ETFs and other securities can fluctuate significantly during any given market session, and our subscribers get a wide range of fills on their trades, depending on the exact time of day, the volatility of the security at the moment of the trade, the bid-ask spread, the amount of money invested in the trade, the investor's status with their broker, and many other factors.  

To estimate a reasonable mid-day on Monday price our subscribers might obtain, we use a calculation for this estimate derived from academic studies. This calculation has proven to provide a reasonably accurate estimate of the average, middle-of-the-day price for Exchange Traded Funds (ETFs). 

 

Here is the calculation for prices used in our models:

High + Low + (Close x 2) / 4  = Price

 

Prices for ProShares Ultra S&P 500 ETF (SSO) on May 13, 2019:

Open = $116.88
High = $117.79
Low = $114.79
Close = $115.59

 

Calculation for SSO on Monday, May 13, 2019: 

117.79 + 114.79 + (115.59 x 2) = 463.76 / 4 = $115.94

  

Keep in mind that when a transaction is recommended on a Sunday, we don't have a crystal ball to see the prices for Monday (but wouldn't that be handy?). Therefore, a 'placeholder' price must be used until the next page update. This number is derived from the previous Friday's prices and remains on the pages until the next update of all tables, statistics, and charts.

In the future, we should be able to update prices after Monday's close, as we are working on automating the Premium Strategy page updates.

 

 
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