How many times in glancing through a newspaper have you noticed a listing of current stock prices? Some of us might feel awed by the pages of strange symbols and numbers, while the professionals are probably spending needless hours performing the tedious caluclations required to analyze this information. To aid these frustrated individuals, SOFTSYNC, Inc., has created a software package called The Stock Market Calculator, appropriately named because its primary function is to help the investor (or user) solve the complex equations inherent in Investment Analysis.
The entire package consists of two programs. The first is divided into three sections:
(1) Net Price Worksheet
(2) Profit/Loss
(3) Covered writes
The first section (Net Price Worksheet) derives the buy and sell prices along with their respective commission. This calculated commission should be used as an approximation of the actual commission because these charges tend to vary with each brokerage house. However, figures calculated by the program should be “extremely close” to the charges at most major houses. (A better idea would have been to make the rates variable in accordance to user needs.)
The second section (Profit/Loss is as useful to the seasoned investor as it would be to the armchair speculator. Learning the “bottom line” of a financial transaction is crucial to all individuals. E.g. If you were to buy 100 shares of stock at a price of $23 per share and sell the same stock at a price of $27 per share, the result calculated by the program would appear as follows (See Figure 1).
Both of the previously mentioned sections can be used as a learning tool for the novice investor or student interested in seeing commission charge fluctuations and profit/loss figures for varying size transactions of stocks or contracts, particularly because of the speed of the program.
Figure 1.
BUY 100 SHARES AT 23 SELL 100 SHARES AT 27 COMMISSION: ON PURCH $61.08 ON SALE $67.37 NET DOLLARS: ON PURCH $2361.08 ON SALE $2632.63 PROFIT: $271.55 (11.5 PCT) ■ PRESS ANY KEY
Again the resulting profit or loss will vary slightly due to the approximated commission rate, but consequently the total calculating time by the program was under 2 seconds.
The third section (covered writes) is a bit more complicated and basically geared towards the investors familiar with different market hedging strategies and the concept of call options. E.g. see Figure 2 and 3.
The right side of Figure 2 represents the information required to calculate the appropriate “cover” for a specified position.
NOTE: You can only cover buys of “round lots” (multiples of 100). This is because 1 call contract fully covers 100 shares of stock. The resulting output (Figure 3) does return to you a surplus of important information concerning the factors involved in covering your desired position. And at this point, previously defined variables (from Figure 2) can be altered and the results recalculated. Total calculating time for this section is under 5 seconds.
SOFTWARE PROFILE
Name: The Stock Market Calculator
Type: Financial
System: 8K ROM; 16K RAM
Format: Cassette
Summary: Excellent documentation; fairly well-written programs; something for everyone.
Price: $14.95
Manufacturer:
Softsync, Inc.
14 East 34th St.
New York, NY 10016
The second program on this tape repeats the Net Price Worksheet and adds a section called the “Write Unwrapper.” This section can be considered complementary to the Covered Writes section in the previous program. In this section you input your past “covered” position and the program outputs your financial position if you were to sell your stocks and repurchase your previously written calls. Total caluclating time for this section is again under 5 seconds.
Figure 2.
** COVERED WRITING WORKSHEET **
ENTER THE FOLLOWING DATA:
CURRENT DATE -MONTH 11
-DAY 30
-YEAR 82
STOCK SYMBOL IBM
STOCK PRICE 56
NUMBER OF SHARES 200
ANNUAL DIVIDEND/SHARE 6
NBR OF PMNTS EXPECTED 4
OPTION EXP MONTH FEB
OPTION STRIKE PRICE 58
OPTION MARKET PRICE 2
MARGIN INTEREST RATE 17
Figure 3.
*** COVERED CALL WORKSHEET ***
11/30/82
BUY 200 IBM AT 56 YLD -14
.3
SELL 2 FEB 58 CALLS AT 2
DEBIT 54 DAYS TO EXP 87
MGN RATE 17
** CASH **
CAPITAL REQUIRED $11020.33
EXERCISED RTN 18.11 ANN 75.98
SAME PRICE RTN 16.15 ANN 67.76
BREAKEVEN PRICE/SHARE $47.1
** MARGIN **
CAPITAL REQUIRED $5328.33
EXERCISED RTN 33.13 ANN 138.99
SAME PRICE RTN 29.07 ANN 121.96
BREAKEVEN PRICE/SHARE $48.25
Besides the fairly well-written programs contained in this package, users will find that the documentation is also excellent. You are given definitions of terms used and data by which to check computer calculations. This is one of the most important points to consider when purchasing software, and one of the reasons why the Stock Market Calculator has something for everyone.
R.M.D.