Hi all. With the new TFSA room available at the start of the year, I was going to make my regular deposit, and then preform Norbert’s Gambit as I routinely do. Normally I’ll just use a pre made spreadsheet or something to get a rough idea of costs, however, there are a lot of issues and missing features from a lot of these tools. This prompted me to build my own tool, which will account for a lot of the mechanics that existing tools leave out. I’ll include a brief rundown of the main features I decided to include. On top of this, I built a UI that gives you the ability to pull bid / ask spreads directly, as well as BoC FX rates on the fly. Below is the brief list of functionality:
- Bid / ask spreads: This tool accounts for the live bid / ask spread on both DLR.TO and DLR.U.TO. Most existing tools don’t account for this, and only pull a single quoted price. Not only is it important to know the exact prices at which you will trade for the sake of accuracy, but also because it is likely that potential ECN fees will be codependent on whether you choose to transact at the bid or ask.
- FX rates: Most tools only pull the current fx rate, and use it to calculate trading costs throughout the entire pair of trades. I have implemented the ability to specify an fx rate on both the date of purchase and the date of sale. The benefits of this are twofold. First, inbetween the purchase and sale date, the investor may experience a meaningful amount of drift in currency prices. If this is not accounted for, the trading costs will not be accurate. Second, the integrity of the data of past trades will not be skewed based off the interest rate drift from the time the trades occurred to the time the calculation is being ran.
- Implicit costs: Most tools will only account for explicit trading costs, defined as the sum of the ECN fees and commissions. In addition to explicit costs, this tool also accounts for implicit trading costs. These consist of both the bid / ask spreads that could be either payed or earned based on the investors liquidity preferences, and the profit / loss realized from fx rate drift while the trades are settling and the shares are journaling.
If you are interested in using the tool, you can find the link below. I may have rushed it a little bit, as I just got the idea a couple of days ago, and wanted to get it out as soon as possible for those like myself who contribute to
... keep reading on reddit ➡
Read the Preface, The Idea of a Contingent Universe, starting on page 31 in this pdf. It should get some lights going off for you. Then, please, feel free to read on...
Keep in mind that this, and cybernetics/statistical mechanics in general, has been cited as one of Pynchon's heavier influences.
I would almost go so far as to cite this book, with a touch of imagination, as a major component of ATD's central, nearly cosmic, thesis.
https://preview.redd.it/8zteojx3z0a81.jpg?width=1000&format=pjpg&auto=webp&s=38ac49dfcda2d417110ab7aa57dc5d28a60f4481
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