Tuesday, May 10, 2011

Akamai Technologies, Inc. (AKAM)

Average gains of 69.2% per trade are okay I guess, middle of the road really, but what's the actual return on investment of trading Akamai Technologies since 2003? For the sake of simplicity (my own sake at least), let's start with just $1 invested/traded in April 2003. The current value of that $1 is $13.58, so that's a total return of 1,258% over about 8 years. Is that good? A simple buy-and-hold strategy over the same time period would have produced a return of 1,405.2%, so I'm going to have to give this one a B+. 



1. LONG the week of 4.21.03 at $2.30. My stop was $1.21, so the initial risk (R) on the trade was $1.09. Stopped out and reversed to short at $12.80 the week of 11.15.04. The percentage gain on the trade was 456.5%, and the reward-to-risk ratio was $10.50/$1.09 = 9.62. 

2. SHORT the week of 11.15.04 at $12.80. Using $17.03 for a stop, R = $4.23. Stopped out and reversed to long at $14.54 the week of 7.11.05. The percentage loss on the trade was -13.6%, and the reward-to-risk ratio was -$1.74/$4.23 = -0.41.

3. LONG the week of 7.11.05 at $14.54. With the stop set at $11.45 my risk was $3.09. Stopped out and reversed to short the week of 4.23.07 at $44.80. The percentage gain on the trade was 208.1%, and the reward-to-risk ratio was $30.26/$3.09 = 9.81.

4. SHORT the week of 4.23.07 at $44.80. The stop was $57.87, so R = $13.07. Stopped out and reversed to long at $40.33 the week of 5.12.08. The percentage gain on the trade was 10.0%, and the reward-to-risk ratio was $4.47/$13.07 = 0.34.

5. LONG the week of 5.12.08 at $40.33. With $29.01 for my stop the R on the trade was $11.32. Stopped out and reversed to short at $23.50 the week of 7.28.08. The percentage loss on the trade was -41.7%, and the reward-to-risk ratio was -$16.83/$11.32 = -1.49.

6. SHORT the week of 7.28.08 at $23.50.  The stop was $36.21, so that means R was $12.71. Stopped out and reversed to long the week of 2.2.09 at $17.41. The percentage gain on the trade was 25.9%, and the reward-to-risk ratio was $6.09/$12.71 = 0.48.

7. LONG the week of 2.2.09 at $17.41. My stop was $10.19, so the risk on the trade was $7.22. Stopped out and reversed to short at $16.44 the week of 7.27.09. The percentage loss on the trade was -5.6%, and the reward-to-risk ratio was -$0.97/$7.22 = -0.13.

8. SHORT the week of 7.27.09 at $16.44. The initial stop was $23.89, so R = $7.45. Stopped out and reversed to long the week of 11.2.09 at $23.32. The percentage loss on the trade was -41.8%, and the reward-to-risk ratio was -$6.88/$7.45 = -0.92.

9. LONG the week of 11.2.09 at $23.32. With my stop set at $17.44 the risk was $5.88. Stopped out and reversed to short at $41.43 the week of 2.7.11. The percentage gain on the trade was 77.7%, and the reward-to-risk ratio was $18.11/$5.88 = 3.08.

10. SHORT the week of 2.7.11 at $41.43. The initial stop was $54.06, so R = $12.63. Closed last week at $34.62 with a $44.48 stop. The percentage gain on this trade is 16.4%, and the reward-to-risk ratio is $6.81/$12.63 = 0.54.

Bottom Line:
Winning Trades: 6 | 60.0% | $12.71/share avg.
Losing Trades: 4 | 40.0% | -$6.61/share avg.
Average Trade: Gain of 69.2% | $4.98/share | Reward-to-Risk Ratio (R): 2.09

No comments:

Post a Comment