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Price Algorithm Changes Part 2

I upgraded the first part of the pricing algorithm revision a few weeks back but I've been waiting on installing the last part until the competition was finished so as to avoid any nasty surprises or adverse affects on anyone's portfolio. I will likely be upgrading the last part this week at some point.

Some of the changes will include:
- equal price movements per share traded given the same share float.
- no more daily price movement limits.
- no more price movement limits based on previous orders traded.
- price movements that scale given the amount of share in the float. i.e. smaller floats create larger price movements per share traded and larger floats create smaller price movements per share traded.

My aim is to create a simple, more predictable price algorithm as well as one that better reflects the prices of stocks given the amount of shares held. Right now a big problem is that people can load up on a stock but then sell it off and the price doesn't drop accordingly. The most recent example is with the Pistons winning the Cavs-Pistons series. By the middle of game 6, there were less shares outstanding for the Pistons to win than for the Cavs to win yet the price was still higher for the Pistons to win.

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This page contains a single entry from the blog posted on June 3, 2007 11:47 PM.

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