STOCK MARKET GAME Rules of the Game. 1.Cost $ 7 / team – max 5 members / team to be sure that you...

STOCK MARKET GAME

Rules of the Game

1.Cost

$ 7 / team – max 5 members / teamto 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

3. Each Team Gets $100,000

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

4. 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

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

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!)

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 $

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

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

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

11. Interest on Loan is 7%

•

12. Minimum Stock Price: $5

•

13. Brokerage Fee (Transaction Fee)

• You must pay 2% of the Value of each Buy and Sell transaction.

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

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

16.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.

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

18.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

19. 10 Minute Break

• Stock Market Quiz after break

20. Learning from the Market

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

22. Play the Game

• Need Login ID & Password

• To Practice use – SIA_49_A25

• password is - YIL11470

• DO NOT Change password

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

24. For Students

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

25. Team ID’s & Passwords

• You should Keep a copy of Student Team• Login IDs and Passwords

After LoginMain Stk Mkt Page (Menu Page) Change Password (bottom right)• Have Students Change team password to something

they will remember• Passwords are Case Sensitive

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

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