1. Initial Cash Balance - Each team will begin with $100,000. In order to be eligible to be a winner, a team must make at least one trade. Teams must make a trade in order to appear in the rankings.
2. How To Invest – Before making any transactions, you must have your team number, password, and the ticker symbols of the securities you wish to buy/sell.
3. How To Play - Stock Market Challenge Home Page. Visit our home page to submit transactions, review your team's activity, research stocks, obtain quotes, find ticker symbols, and review your team's ranking. This is the best way to transaction because it is fast, accurate, and convenient.
Investing in Stocks: There are four basic ways to transaction stocks: buy (BO), sell (SC), short sell (SS), and short cover (CO). When buying a stock, you are taking a "long position" with the hope that the price per share will increase. When you sell a stock, you close or reduce that long position. Selling short is selling a stock that you don't own (you actually borrow the stock from the broker) with the hope that you can later buy the stock back at a lower price. When you buy the stock to pay back what you borrowed, it is called "covering" your short position. To buy or short sell a stock, specify how many shares you want, rather than how much money you wish to spend.You may not be long and short in the same stock at the same time. Day trading is not allowed.Duplicate transactions on the same day are not allowed.
Investing in Mutual Funds: Stock Market Challenge allows you to buy or sell mutual funds. Mutual funds are transacted in dollar amounts not by number of shares. Mutual funds must be bought or sold in lots of $500. To sell off all of your mutual fund shares enter a “99999” in the box for dollar amounts. Like stocks, in order to buy or sell mutual funds you must have the ticker symbol. All mutual fund ticker symbols are five letters long ending in "X".
4. Investing Times and Prices Received
Stocks: Trades made via the web page will receive 15-20 minute delayed prices if placed while the market is open (generally 9:30 a.m. and by 4:00 p.m. EST). Transactions placed after the market has closed will receive the next day's open price. Transactions made via fax and received before the market close will receive that day's closing price. Transactions made after market close will receive the next day's closing price.
Mutual Funds Mutual funds are always transactions at the end of day prices (NAV or net asset value). Transactions received before market close will be placed at the closing price for that day. Transactions made after market close will receive the next day's closing price.
5. Splits, Dividends and other Corporate Actions - All stock splits and all dividend payments over $0.10 will be credited to your portfolio. Splits that have been credited to your portfolio have the appearance of a buy or short sell, but the price per share is $0.00. Dividends will appear in your portfolio with a “DIV" attached to the ticker symbol. In order to receive a split and/or dividend, a team must have a current open position in the stock by the Ex-Date (The ex-date is usually two business days before the record date. It is indicated in newspaper listings with an x.). Splits and dividends will be posted in accounts by the "Ex-Date."
6. Securities that can be bought or sold
Stocks: You may buy, sell, sell short, and cover a short almost all NYSE and NASDAQ-AMEX stocks (common and preferred) that are trading at $3.00 or more and have a current reported volume of at least 10,000 shares. IPOs are usually available within 48 hours of the day the stock starts trading on the exchanges.
Mutual Funds: You may buy and sell any of the U.S. Mutual funds listed, regardless of the price (No $5.00 minimum price as with stocks).
7. Volume and Purchase Restrictions: - Throughout the simulation, teams may invest no more than $50,000 in any one stock. For example, if you buy $50,000 in any one stock and the price increases, you are not required to sell any portion of that stock to remain at $50,000. Teams may not buy or short sell stocks trading for under $3 per share (no penny stocks). The maximum number of shares a team may transact is limited to one-half of the actual volume for that day. All stocks have a 25 share minimum but do not have to be in multiples of 25 shares per transaction. For example, you can now buy 26 shares or 157 shares, but not 24 shares. Mutual funds must be transacted in lots of $500.You may not hold a short and a long position in the same stock at the same time. Duplicate trades on the same day are not allowed.
8. Ticker Symbols - You need to know the ticker symbol for the security before you can buy or sell it. Please note that most local newspapers show only the abbreviation of the company name, not the ticker symbol. The Wall Street Journal and the SMS web page are two really good sources to help you find the ticker symbols you need. You can also find links on our research page that will help you find a certain ticker symbol.
9. Commissions - A broker's commission is applied to most transactions. The commission for stock transactions is a flat fee of $25 on each transaction regardless of the number of shares. If you sell one stock and buy another you will be charged two commission fees. Mutual funds are not charged a commission.
10. Margin Requirements – The margin requirement for the simulation is 50%. Initially, this means that since you are starting with $100,000, you may borrow another $100,000, making your total buying power $200,000, minus commissions. You may buy and short sell stocks on margin.
11. Interest Earned – Interest will be earned on all available cash balances and credited at the close of each day. During the simulation, cash balances will earn 3% interest, compounded yearly.
12. Interest Charged – Interest will be charged on all loan balances and will be debited at the close of each day. During the simulation, loan balances will be charged at 8% interest, compounded daily.
13. Portfolio Statements – Team activity or portfolio statements are available on the internet at www.stockmarketchallenge.com 24 hours a day. Students are encouraged to print these off periodically. It is important to keep copies of the statements received since they cannot be reprinted. Team activity and team rankings are updated every business day on the web page.
14. Number of Transactions – Each team is limited to 100 transactions during the 10-week period. Each buy, sell, short sell or short cover counts as a transaction. For example, if you buy a stock and sell another stock you will be charged with 2 transactions.
15. End of the Simulation – You do not need to convert all of your investments to cash on the last day of the simulation. Your portfolio will be valued at the closing prices for that day. Official winners of the simulation will be notified by the Stock Market Challengel on Economic Education.
16. Disputes and Errors – If you and your teacher believe an error has been made in your portfolio, your teacher may call STOCK-TRAK @ 1-866-SMS-DESK, toll-free, to discuss the problem. Please review your statements and report any problems right away. Trades that result from cases of stolen passwords, those submitted by a team member without the consent of his or her team mates, and/or trades that result due to human error will not be deleted from accounts.
- If you and your teacher believe an error has been made in your portfolio, your teacher may call an 800 number to discuss the problem. Please review your statements and report any problems immediately.
- Trades that result from cases of stolen passwords, those submitted by a team member without the consent of his or her team mates, and/or trades that result due to human error will not be deleted from accounts.
- The Stock Market Challenge and the management of Stock-Trak, Inc. are not responsible for trades or quote prices that are incomplete, incorrect or not received.
- The Stock Market Challenge and the management of Stock-Trak, Inc. may use various methods (such as time and tape analysis) to resolve disputes.
- The decision made by The Stock Market Challenge and/or the management of Stock-Trak, Inc is final.
- The Stock Market Challenge and the management of Stock-Trak, Inc. have the right to adjust or delete trades that are believed to be incorrect, and the right to terminate any account that they believe may have attempted to exploit, manipulate, or sabotage any part of the SMS trading system and/or web page.
- The Stock Market Challenge and the management of Stock-Trak, Inc. have the ultimate authority to settle disputes.
- The Stock Market Challenge and the management of Stock-Trak, Inc.'s liability is limited to the fee paid for the service.