The FoH Stock Market Game

[Morb]

Originally Posted by Millie

At the end of the day, I wouldn't be surprised at all if that guy who made 15% on day one -- then sold everything, and has remained 100% in cash ever since -- wins the competition. By the end of this run, the best of us will be lucky to have made 15%.

Before saying things like this, please verify what you're saying is actually true. You're able to view my Orders and Transaction History. I've been actively playing.

12/4 - Sell short $30k of Worldspace Satellite Radio.
12/4 - Buy $170k GlobalSpace (a micro-cap software company).
12/6 - Sell GlobalSpace position for 5% profit.
12/7 - Buy to cover Worldspace position for 24% profit.
12/11 - Buy $80k of DXD (an ultrashort fund that doubles the inverse return of the Dow).
12/11 (four hours later) - Sell DXD for 3% profit.

The market is closed on weekends, which means I've had an active position every day except Monday.

I know I haven't posted much commentary, which could lead you to believe I'm just some robot. In actuality, I just didn't really know how to post "tips" without sounding pretentious. So my plan was just to play the game in relative silence, and answer questions if anyone asked. I'm not doing this for attention... if I can help in any way, trust me, I'd be happy to.

[Yutnopash]

I have no idea how the stock market works, I hate Economics.

But after seeing Burkex say:

I am going to be very impressed if someone can go broke in this game.

I shall try and do my best, sir! Mostly by just clicking random shit and stocks. Buy to Cover, Limits, Stops, Sell Short..All jibberish to me..and away we go!

[Ham n Cheese]

Heh what the fuck happened today? Every single one of my stocks went down, I don't pay attention to the real deal, just playing for fun

[Blide]

Fed cut interest rates by .25%, all the investors wanted it to be .5%. As a result the stock market dropped by nearly 300 points.

Also think I put too much money into Apple. Did so with the idea of them unveiling the new MacBooks in the next couple months would boost stocks. Lost 1500 bucks just from Apple stock yesterday.

[Millie]

Originally Posted by Morb

Before saying things like this, please verify what you're saying is actually true. You're able to view my Orders and Transaction History. I've been actively playing.

12/4 - Sell short $30k of Worldspace Satellite Radio.
12/4 - Buy $170k GlobalSpace (a micro-cap software company).
12/6 - Sell GlobalSpace position for 5% profit.
12/7 - Buy to cover Worldspace position for 24% profit.
12/11 - Buy $80k of DXD (an ultrashort fund that doubles the inverse return of the Dow).
12/11 (four hours later) - Sell DXD for 3% profit.

The market is closed on weekends, which means I've had an active position every day except Monday.

I know I haven't posted much commentary, which could lead you to believe I'm just some robot. In actuality, I just didn't really know how to post "tips" without sounding pretentious. So my plan was just to play the game in relative silence, and answer questions if anyone asked. I'm not doing this for attention... if I can help in any way, trust me, I'd be happy to.

If you are "Dahlermendhi"(sp?), then I apologize. Every time I've looked at your portfolio over the last week or so, it's showed all of your holdings in pure cash. That's where I got the assumption from. If this is not true, then I'm sorry. Right now, for instance, if I look at your portfolio, it shows no active positions and roughly $117k in cash.

[Blazemore]

Ya, I just figured out yesterday you can check out everyone's transaction history. There is a tab for it when you click on a individual in the rankings.

I have to learn what buyshort, selltocover is. I was really confused looking at dahlers transaction history. It looks like he sold stock first then bought it a week later or something?? Ya, I am going to do some definition look ups this afternoon after lunch.

Oh and Fudge in the ass my Bank of America Stock... Right in the ass. Just wanted to throw that out there.

[Millie]

Originally Posted by Blazemore

I have to learn what buyshort, selltocover is. I was really confused looking at dahlers transaction history. It looks like he sold stock first then bought it a week later or something?? Ya, I am going to do some definition look ups this afternoon after lunch.

Basically, when you "short sell" something, you are betting the price of the stock will go down over time. So what you're doing is selling shares of the stock that you don't own right now, then later on, you're buying back the shares to "cover" your borrowed sale, but hopefully you're buying those shares back at a lower price. The money you make is in the difference between what you sold at and what you bought back at. It's sort of like the inverse of investing in a stock you think will go up.

Ordinarily, the mantra is "buy low, sell high." For shorting stocks, it's "sell high, buy low."

To give you an example, let's say there's a company called Tuco's Fake-Ass Diamonds (TFD) . Right now TFD is selling at $50 a share, and I think it's overpriced. So I'm going to short TFD. What I do is I borrow 100 shares of TFD and immediately sell them at $50 per share (or roughly $5000 total). Then, when the price of TFD goes down to $30 per share, I buy back my 100 shares at $30 apiece, or $3000. I've just made $2000 in profit.

The gamble you're taking with short selling is that the price of the stock goes UP after you sell it, and you're forced to buy back the stock at a higher price than what you sold it for. This can happen pretty easily, which is why shorting a stock is only something you do if you're pretty confident the stock is overpriced.

[Zippygoose]

The problem with fake money is that when work gets crazy you don't make it a priority and stop paying attention to it for a few days

This game is a great opportunity to get a feel for selling short. I've never done it with my real portfolio (scary!), but with fake money I can at least try it out.

[Blazemore]

Originally Posted by Millie

Basically, when you "short sell" something, you are betting the price of the stock will go down over time. So what you're doing is selling shares of the stock that you don't own right now, then later on, you're buying back the shares to "cover" your borrowed sale, but hopefully you're buying those shares back at a lower price. The money you make is in the difference between what you sold at and what you bought back at. It's sort of like the inverse of investing in a stock you think will go up.

Ordinarily, the mantra is "buy low, sell high." For shorting stocks, it's "sell high, buy low."

To give you an example, let's say there's a company called Tuco's Fake-Ass Diamonds (TFD) . Right now TFD is selling at $50 a share, and I think it's overpriced. So I'm going to short TFD. What I do is I borrow 100 shares of TFD and immediately sell them at $50 per share (or roughly $5000 total). Then, when the price of TFD goes down to $30 per share, I buy back my 100 shares at $30 apiece, or $3000. I've just made $2000 in profit.

The gamble you're taking with short selling is that the price of the stock goes UP after you sell it, and you're forced to buy back the stock at a higher price than what you sold it for. This can happen pretty easily, which is why shorting a stock is only something you do if you're pretty confident the stock is overpriced.

Thanks, this made much more sense then the brief one line definitions I found while browsing around at lunch.

[rinthea]

can you use any leverage or trade options in this game?

[Millie]

Originally Posted by rinthea

can you use any leverage or trade options in this game?

You can buy stocks on a margin, if that's what you mean. I think they let you spend up to your real equity limit on the margin. So if you've got $100k in equity, they let you buy an additional $100k on the margin. They don't really specify what the margin requirements are, however, so proceed with caution.

[Sharmai]

I know so litte about stocks that my collective negative knowledge would bring everyone else down. It is truly a shame since if I knew how to better manage my 401k I could probably bring in a tidy profit by the time i hit 65 in 40 years.

That said this game should be fun for me to try some stuff I really wish I had the time to learn more about stocks but between work and school.. mabye there are some decent audio books out there on the subject..


In any event I am going to play a little differently I am only going to use about 500$ (what I would be willing to invest in real life) and see how I turn out.... Sure I won't get much if any gains if I do well but if I were to invest in real life I wouldn't be able to start with much more then that and I don't take out loans for jack.......

Any hints anyone? I just bought 12 shares of At&T. I think they are going to have a good christmas so I placed a 12 share day order.. I don't understand the differences between limit and market orders so I just put in 12 shares..

[rinthea]

looks like the winner will be one who trades penny stocks on the right side... i just bought 200k of BIDU but I doubt any of the big cap stocks I follow will move enough to make it worth while at 2:1 levergae

[rinthea]

Originally Posted by Sharmai

Any hints anyone? I just bought 12 shares of At&T. I think they are going to have a good christmas so I placed a 12 share day order.. I don't understand the differences between limit and market orders so I just put in 12 shares..

-hint
at $20 a round trip trade per $500 dollars, you have to make 4% per trade to break even... i.e. your fucked before you start... the only person who will win is your broker, commissions will be where your money will go

If people are interested in trading, heres what many consider 'the bible' of trading. Reminiscences of a Stock Operator by Edwin LeFevre, its a real entertaining & exciting read... its more like a biography of an interesting life than a textbook. Has some wisdom & warnings of the life of a speculator. Yeah he jobbed himself after he made and lost his fortune for about the 5th time.

[Burkex]

I wonder if you can buy an IPO when it is first released in this game? If so you could buy IPO's at the starting bell and sell them by noon and make a ton. Underwriters always price them lower then what they are worth so that they always go up and look good.

VIT came out today if you bought it at the bell this morn with your 100,000 you would have made about $5,300 then dumped it. Not bad for one day.

The reason I ask if we can buy them because in the real world the IPO's can usually only be purchased by big buyers like hedge funds and such. There is no way a normal investor gets in on an IPO at the very beginning.

Briefing.com: IPO Calendar