Stock Market Game 2

1
Stock Market Game 2

• Im ready to pull the trigger, now what?

2
Trading Stocks

• Buy Order
• Sell Order
• Short Sell Order
• Short cover

3
Order types

• Market Order - You pay the price at the close of
  day.
• Limit Order - You set the price for what youre
  willing to pay or take (if youre selling)
• If the price reaches this point the trade will be
  made.

4
Buying

• The cost of a share of stock is set by the
  market, in which the stock trades.
• End of Day Game transactions are priced at market
  daily closing prices.
• SMG does not permit buying stocks or mutual funds
  that trade below 5 per share
• In the SMG, 2 is charged to all trades as a
  brokerage commission.
• 100 shares at 10.00 per share 1000 2
• (100x10)1.02 1020
• The value of your stock is equal to your purchase
  price, less the fees (in the previous case 1000
  - 2 980
• All buy orders must be a minimum of 100 shares.

5
Selling

• Sell orders for less than 100 shares will be
  permitted.
• A 2 broker's fee is charged for all
  transactions. For example, if you buy 100 shares
  of a stock at 10 per share, you must pay the 2
  of 1000 or 20.

6
Short Sell Orders

• Selling short is a trading strategy thats
  designed to take advantage of an anticipated drop
  in a stocks market price.
• To sell short, you borrow shares through your
  broker, sell them, and use the money you receive
  from the sale as collateral on the loan until the
  stock price drops.
• If it does, you then buy back the shares at a
  lower price using the collateral, and return the
  borrowed shares to your broker plus interest and
  commission. If you realize a profit, its yours
  to keep.
• Suppose, for example, you sell short 100 shares
  of stock priced at 10 a share. When the price
  drops to 7.50, you buy 100 shares, return them
  to your broker, and keep the 2.50-per-share
  profit minus commission. The risk is that if the
  share price rises instead of falls, you may have
  to buy back the shares at a higher price and
  suffer the loss.
• During the period of the short sale, the lender
  of the stock is no longer the registered owner
  because the stock was sold. If any dividends are
  paid during that period, or any other corporate
  actions occur, the short seller must make the
  lender whole by paying the amount thats due.
  However, that income is taxed at the lenders
  regular rate, not the lower rate that applies to
  qualifying dividend income.All short sell orders
  must be for a minimum of 100 shares.

7
Short Cover