The Georgia Stock Market Game: How to Play
Here’s how to play the game:
Ready. Your team begins with a simulated $100,000 in cash. You can borrow more money, depending on how much equity you have in your account. Each week, the unspent cash in your account earns an annual rate of 5.00 percent interest. If you spend more than $100,000, your account is charged interest at an annual rate of 7.00 percent.
Set. You can only trade stocks listed on the American Stock Exchange (AMEX), NASDAQ, and the New York Stock Exchange (NYSE). You cannot trade preferred stock, (stocks with a “pf” after the ticker symbol).
Go. When you buy or sell a stock, the price is based on the daily closing prices of the market ((AMEX), NASDAQ or(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 Web sites listed on the Investing Links page.
Buy! Sell! When you buy stock, you have to buy at least 100 shares. You can sell as many shares as you want.
No Penny Stocks.Penny stocks are stocks that trade below $5 per share. Penny stocks can be bought and sold in large numbers for much less money than you would pay for a higher priced stock. Anyone buying and selling penny stocks in large numbers can cause the price to rise and fall sharply over a short period of time, which puts other people who own them in a very risky situation. Because of this, the Georgia Stock Market Game does not permit trading in penny stocks. All trades in penny stocks will be automatically rejected. However, if you buy a stock that later drops below $5 per share, you can still sell it.
Money talks. 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.
For a small fee… A 2 percent broker's fee is charged on each transaction. 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.
Open for business. You can enter your trades in Georgia’s Stock Market Game 24 hours a day, seven days a week. But your trades will only be executed at 4 p.m. on days when the participating markets are open for business.
After the bell. Any trade entered after the markets close at 4 p.m. will be priced at the closing price on the next trading day.
Selling Short. All short sell orders must be for a minimum of 100 shares. Because the Georgia Stock Market Game doesn’t permit trading penny stocks (stocks for less than $5 per share) it follows that short selling of penny stocks isn’t allowed either. The reason is excessive risk. Anyone buying and selling penny stocks in large numbers can 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.
Where’s your Portfolio? Buy first. To see your portfolio, you must make your first transaction. The day after your transaction, your team portfolios and transaction records will be posted. Your team will also be listed in regional rankings.
Check your work. 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 email Georgia Stock Market Game Coordinator Barbara Futrell with any problems you encounter.
At the Bell… All pending transactions can be deleted prior to market close.
Warning. Any violation of Georgia Stock Market Game rules may invalidate a transaction. Repeated violation of the rules may result in the disqualification of a team.
How low can you go? 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.
Play by the Rules, or else. Teams that do not comply with the Georgia Stock Market Game rules are subject to removal from the portfolio rankings. Authority to remove teams from portfolio rankings lies solely with the Georgia Stock Market Game coordinator.
It’s up to you. Your team is responsible for any opening or closing transactions entered into your portfolio.
It’s your portfolio. Teams may not enter transactions into portfolios other than their own. However, if your team challenges a transaction as entered by a non-member of your team, the portfolio rankings will still include the challenged transaction. That’s why it’s important to keep your password a secret, because once a trade is done, it’s done.
To make it official… A transaction must be recorded on the Stock Market Game database in order to be factored into portfolio rankings.
If the numbers don’t add up… 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.
Spread the risk around. Your team should have at least three different stocks in your portfolio. The more different stocks your team owns, the more diversified your portfolio and the less risk in your portfolio should one of your stocks drop quickly in price.
*Remember—You will access your portfolio by visiting and clicking on “PLAY the Stock Market Game”
A new window will appear and ask for your team userID and password.
My team’s UserID is ______and the password is ______.
With your entire team’s permission, you may change the password to something easier to remember once the game begins.
You may NOT buy or sell stock without the majority decision of your team!!!