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STOCK MARKET GAME

STOCK MARKET GAME. Rules of the Game. 1.Cost. $ 7 / team – max 5 members / team to be sure that you play GCEE pays $22 / team SIFEE – runs the game GA – largest SMG in U.S. 2. Must Attend Workshop. To play the game must attend workshop. Each Team Gets $100,000.

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STOCK MARKET GAME

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  1. STOCK MARKET GAME Rules of the Game

  2. 1.Cost $ 7 / team – max 5 members / team to be sure that you play GCEE pays $22 / team SIFEE – runs the game GA – largest SMG in U.S.

  3. 2. Must Attend Workshop • To play the game must attend workshop

  4. Each Team Gets $100,000 • Each team gets $100,000 cash to start.

  5. Invest for 10 Weeks • October 4 to December 10 • Real World never invest for just 10 weeks • Strategy to win the game • Buy low cost & highly volatile stocks • Not a strategy for retirement or LT investing

  6. 5. Winning Team • Highest Portfolio Value (total Equity) • Regional Winners – school districts • Carroll Co. - Carrollton City – Independent • Students get T-Shirts • Go to Atlanta (underground) winners lunch State Winner Team Trophy Teacher gets week in NYC

  7. 6. Purchase Individual Stocks • NYSE – AMEX – NASDAQ • Mutual Funds & Preferred Stock – ok • Bonds - ok • No Bank CD’s – T-Bills • To win buy low & sell high (ha!)

  8. 7. Need Computer in Room • Game is online from anywhere in World • 24/7 • Have just one student enter buy/sell for team • Hardest part of the Game Kids Do Not Want to Spend Their $

  9. 8. $ held in Cash earn 2% • In real world – you would want to Diversify not 100% in Stock • To Win Game – Must spend $200,000 on Stock - all your cash + borrow $100,000

  10. 9. Buy on Margin • Initial Margin is 50% Margin = Portfolio Value (PV) – Loan (L) Margin/PV = margin as a % of PV = 50% • Eg 200,000 pv PV – L >= .50 100,000 loan PV 100,000 margin L <= .50 PV PV = Stock + Cash

  11. 10. Margin Call • If your collateral (portfolio value) decreases your broker (lender) may want more collateral (will make you sell stock) • Game Maintenance Margin (MMR) is 30% ie., Margin = (PV – L) > = .30 PV or LOAN <=.70PV This requires a minimum PV > 1.43 (Loan) If you fall be low the MMR you get a Margin Call Must then (within 3 weeks) sell stock

  12. 11. Interest on Loan is 7%

  13. 12. Minimum Stock Price: $5

  14. 13. Brokerage Fee (Transaction Fee) • You must pay 2% of the Value of each Buy and Sell transaction.

  15. 14. GA SMG – Extra Rules • Not in the Manual • 3 X 3 X 3 • 1st Transaction by end of 3rd week • Buy a Minimum of 3 Stocks • Hold 3 Stocks for min of 3 Weeks

  16. 15. How Do You Win ? • Buy Low Priced Volatile Stocks Kids want to by companies they have heard about (Nike , WalMart, Coke, Home Depot, etc) $100/sh – buy 1000 shs for $100,000 in 10 weeks $102/sh x 1000sh = $102,000 - a $2000 profit\ but after a brokerage fee (2% in & 2% out) actually loose money or $10/sh – buy 10,000 shs – for $100,000 in 10 weeks $12/sh – sell 10,000 shs – for $120,000 - a $20,000 profit NYSE – generally Higher priced and Larger companies NASDAQ – generally Lower priced and Smaller companies

  17. On Last Day Do Not Sell Stock • You win with the highest P.V. • Avoid brokerage fees on the last day • Cannot actually Buy $200,000 initially (ie, borrow $100,000) must pay $2000 brokerage fee on first $100,000 and then can only borrow approximately $98,000 and must pay 2% on the purchase with borrowed funds. You will only be able to purchase about $196,000 of Stock initially.

  18. 17. Short Sale • You borrow your NEW briefcase for 3 weeks –but then sell it immediately for $100 (SHORT SALE) – because I know that on the 3rd of February Mori Luggage is having a half priced sale on the exact same briefcase. • I can buy a NEW briefcase back in 3 weeks for $50 and then give it back to you. (SHORT COVER) • KO example - as stocks go up you can face unlimited losses

  19. Buy & Sell at 4 PM closing price • 2nd period buy coke - by 3:30 pm price increases – you decide you do not want it – you can cancel your order up to 3:59 pm

  20. 19. 10 Minute Break • Stock Market Quiz after break

  21. 20. Learning from the Market

  22. 21. Must Register • Go To - gcee.org • Select Type: Teacher with class Teacher as individual • Give correct E-mail (one you use) • The sooner you make a payment the sooner your teams get a Login In ID • # of Classes - NOT # of Teams

  23. 22. Play the Game • Need Login ID & Password • To Practice use – SIA_49_A25 • password is - YIL11470 • DO NOT Change password

  24. 23. For Teachers (gcee.org) • Teacher Support Center • FAQ – need 1 computer in room • View Teacher Classroom Experience • Grading Tip – Photo of each Team – rank on wall by P.V. • If Something Goes Wrong Call Barbara Frutel 404-651-3280 or 1-877-7529764

  25. 24. For Students • Rules (How To Play the Game) what we went over (1. – 18.)

  26. 25. Team ID’s & Passwords • You should Keep a copy of Student Team • Login IDs and Passwords After Login Main Stk Mkt Page (Menu Page) Change Password (bottom right) • Have Students Change team password to something they will remember • Passwords are Case Sensitive

  27. 26. Play the Game • GCEE.ORG • CLICK – Play the Stock Market Game • Login ID & Password • Menu Page Account Summary Gains and Losses Pending Transactions Account Holdings Investor Research Transaction Notes Transaction History Enter A Trade

  28. 27. How to Find Good Stocks • Screening For Stocks • 1.  http://finance.yahoo.com/q/hl?s=BRUSX •   This site lists the largest 10 holdings of an untra small cap mutual fund that has had an average return of 25 % per year for 5 years ending in Dec. 2007 • 2.   http://finance.yahoo.com/gainers?e=o • This site lists the top % price gainers from the day • before.  Also, in the left column you can also select the • top % price loosers from the day before.  A good list to • find potential 100 % gainers over the next ten weeks • 3. http://screen.finance.yahoo.com/stocks.html • This site allows you to set criteria for stock you want • Price, P/E, Max Market Cap, etc

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