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April 15th, 2011, 07:31 PM   #1
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Selling shares

Hi all,

I have a question relating to share trading, I hope someone can help me out with.

Here is the scenario:

I buy 120,000 shares in stock AAA at $1.00 per share.
I buy another 57,000 shares in stock AAA at $1.46 per share.
I then buy 80,000 shares in AAA at $0.96 per share.

To sum this up, I have 257,000 shares. (120,000 + 57,000 + 80,000)

and this cost a total of $280,020.
((120,000 x 1) + (57,000 x 1.46) + (80,000 x 0.96))

Therefore my average price per share is 257,000 / 280,020

= $0.91779158 per share.

I decide to transfer 100,000 shares to a friend using this price.

So the question is: How many shares do I need to sell from each parcel to get the average price per share?

I would love it if someone could post the steps involved to work this out.

Cheers!
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April 16th, 2011, 12:04 AM   #2
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Re: Selling shares

Hi,

Please ignore the above example. It confused even me and the average price is incorrect. My apologies. Here is another example which I hope makes it clearer.

I buy 1000 shares in AAA at $1 per share. So cost = $1000

The stock went up and I decide to buy another 5000 shares in AAA at $2 per share. So cost = $10,000

I again buy another 4000 shares in AAA at $3 per share. So cost = $12,000

So totally, I have 10,000 shares and it cost $23,000

Therefore my average price per share is $2.30 (23,000 / 10,000)

I decide to sell 3000 shares at $2.30, and I want to take in out in proportion to the the parcels. (pro rata)

So question: How many shares should I sell from each parcel to maintain the average?
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