Do I need to know about the stock market before I play?
What’s the first step?
How do I trade?
Can my team borrow more money?
What stocks can I buy?
What stocks can’t I buy?
How do I know how much stocks cost?
How many stocks do I have to buy or sell?
Are there any trading fees?
When can my team trade?
What is short selling?
Can I short sell penny stocks?
How are dividends and stock splits factored into my account?
Is there a minimum amount of value my portfolio must have?
Can someone other than members of my team enter a transaction?
What happens if there’s a discrepancy in my portfolio?
Can I have only one stock in my portfolio? |
| Do I need to know about the stock market before I play? |
No. You can learn most of what you need to know from your teacher. One purpose of the Stock Market Game is to teach you how to research and execute trades. You can learn as you go along.
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| What’s the first step? |
Once your team is registered, the first thing you must do is execute a trade. Then your team portfolios and transaction records will be posted daily and listed in regional rankings.
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| How do I trade? |
Each team begins with a simulated $100,000 investment portfolio that your team uses to buy stocks.
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| Can my team borrow more money? |
Teams can borrow more money, but your team must have enough equity to borrow. Each week, the unspent money in your account earns an annual rate of 5.00 percent interest. If you don’t have any money, your account is charged interest at an annual rate of 7.0 percent for the money you borrow beyond the $100,000.
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| What stocks can I buy? |
Your team can buy stocks listed on the American Stock Exchange (AMEX), NASDAQ, and New York Stock Exchange (NYSE) except those listed under the next question.
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| What stocks can’t I buy? |
No preferred stocks and no penny stocks. You may not trade preferred stock, stocks with a “pf” after the ticker symbol, because they pay fixed dividends to a few select shareholders. Trading in penny stocks is not permitted in the Georgia Stock Market Game. Anyone buying and selling penny stocks (below $5 per share) in large numbers might cause the price to rise and fall sharply over a short period of time, putting other people who own them in a very risky situation. All trades in penny stocks will be automatically rejected. However, if you own a stock that drops below $5 per share, you can still sell it.
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| How do I know how much stocks cost? |
The price of stocks is based on the daily closing prices of the market (AMEX, NASDAQ, NYSE) where the stock is traded. You can find the daily closing prices in the next day’s newspaper or look it up on any of the stock trading Web sites listed on the Investing Links page.
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| How many stocks do I have to buy or sell? |
Stocks must be purchased in lots of at least 100 shares. You can sell as many shares as you want. Trades can only be processed in whole and will be rejected if you don’t have enough money in your portfolio to execute the entire order.
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| Are there any trading fees? |
Yes. For each transaction, a 2 percent broker's fee is charged. For example, if you buy 100 shares of a stock at $10 per share, you would pay $1000 for the stock plus the 2 percent fee of $20. When you sell or short sell stock, the SEC requires that you pay a fee of 1/300 of 1 percent, rounded to the nearest penny, in addition to the 2 percent broker’s fee.
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| When can my team trade? |
You can enter trades in Georgia’s Stock Market Game 24 hours a day, seven days a week. But the trades can only be executed when the participating markets are open during regular business hours. Any trade entered after the markets close at 4 p.m. will be priced at the closing price on the next trading day. All pending transactions can be deleted prior to market close. Your team is responsible for any opening or closing transactions entered into your portfolio. A transaction must be recorded on the Stock Market Game database in order to be factored into portfolio rankings.
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| What is short selling? |
Basically, short selling is borrowing shares of a stock from your broker to sell on the open market. However, your team must cover the “borrowed” shares by buying enough shares to return those you borrowed. Short selling can be a useful strategy for those who think the price of a stock is going to decrease in the short term. The idea is to sell the borrowed stock now at a higher price, and once the value of the stock falls, buy it to replace the borrowed stock. The profit is the difference between what is paid per share and what is received per share. Be careful if the price of the stock begins to rise, because at some point the stock must be bought back, or short covered, and returned to the broker. To calculate a short position, multiply the current price per share times the number of shares sold short. All short sell orders must be for a minimum of 100 shares. Short cover orders for less than 100 shares will be permitted.
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| Can I short sell penny stocks? |
No. The Georgia Stock Market Game doesn’t permit trading penny stocks at all.
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| How are dividends and stock splits factored into my account? |
Stock dividends, cash dividends and stock splits are automatically computed into your portfolio. Remember, you must still check your portfolio transaction records for accuracy. Promptly e-mail Georgia Stock Market Game Coordinator Barbara Futrell
with any problems you encounter. |
| Is there a minimum amount of value my portfolio must have? |
Yes. Your team must maintain at least 30 percent in equity. That’s the amount you use as collateral on money you’ve borrowed to buy stock. If you go below that amount, the Stock Market Game automatically sells or short covers some of your team’s stock, enough to pay off your team’s debt to get you to 30 percent equity. The proceeds of any sale or short cover will be used to pay off some of the money your team borrowed to reduce your amount on margin, or debt. Here’s how it works-- if your team’s holdings don’t increase enough to meet the minimum maintenance requirement of 30 percent equity, or if your team doesn’t sell any stock within three consecutive weeks, the margin requirement of 30 percent equity will automatically be paid by liquidating (selling) enough long and short positions, beginning with the lowest priced stocks, until the minimum maintenance requirement is met.
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| Can someone other than members of my team enter a transaction? |
Teams may not enter transactions into portfolios other than their own. Keep your password a secret, because once a trade is done, it’s done.
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| What happens if there’s a discrepancy in my portfolio? |
The Foundation for Investor Education is responsible for the accuracy of market data in the Stock Market Game. If you believe any information, including stock prices, is inaccurate, contact Georgia Stock Market Game Coordinator Barbara Futrell.
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| Can I have only one stock in my portfolio? |
No. Your team must have at least three different stocks in your portfolio.
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