mock trading session finance club university of illinois
TRANSCRIPT
MOCK TRADING SESSION
Finance ClubUniversity of Illinois
Personal Shopper
Go buy me a 10 second
car
Personal Shopper = Broker
Go buy me a 10 second
car
• You are the Broker• This is a Market Order• You'd better buy your
client a good car at a good price
Personal Shopper
Go buy me a Porsche
Porsche Cayenne Turbo
… a blue one
… but don't pay more than $93,000
Personal Shopper = Broker
Go buy me a Porsche Cayenne Turbo
… a blue one
• You are the Broker• This is a Limit Order• You'd better buy your client a blue
Porsche Cayenne Turbo and you'd better not pay more than $93,000
… but don't pay more than $93,000
Limit OrderGo buy me a Porsche
Cayenne Turbo
Porsche Cayenne TurboFully Equipped
$90,000
… a blue one
… but don't pay more than $93,000
My client is now $3,000 happy
You're my new best friend
Limit OrderGo buy me a
Porsche
Porsche Cayenne TurboFully Equipped
$100,000
… a blue one
… but don't pay more than $93,000
YOU'RE FIRED
… AND I'M NOT
PAYING!
Personal Shopper
Go buy me a share of Nike
… but don't pay more than $50
• You are the broker• This is a limit order• You better buy your
client a share of Nike (NKE) and you'd better not pay more than $50/share
Broker
Buy Nike (NKE) Limit $50
• The order comes in to broker J
Client Order
BUY LIMIT 50
C F
Buy me a share of stock, butdon't pay more than
$50
If your order is completed, you will receive a $1 commission
Broker
• J's Trading Symbol is at the bottom of the I>clicker
J My Symbol
Power On
Broker
• Buy Nike Limit $50• J, as the broker, must
buy his client a share of Nike ≤ $50.
• Enter a bid by clicking on C
C = BID
J
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
0JJ's Bid
Broker
• Increase the bid by clicking on C
C = BID
J
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
0JJ
J's Bid
J
J
J
J
J
Oops. Too High
Broker
• Use D to lower the bid to $48
• My limit is $50, but let's see if I can get someone to sell for $48
D = BID
J
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
0
J's Bid
J
JJ
J
Personal Shopper
Go sell my share of Nike
… but don't take less than $48
Broker
• You are the broker• This is a limit order• You better sell your
client's share of Nike (NKE) and you'd better get at least $48/share
Sell Nike (NKE) Limit $48
• The order comes in to broker M
Client Order
Limit Order
SELL LIMIT 48
C F
Sell a share of stock for me,but don't sell for less than
$48
If your order is completed, you will receive a $1 commission
Broker
• Sell Nike Limit $48• M, as the broker, must
buy her client a share of Nike ≥ $48.
• Enter an ask by clicking on B
B = ASK
M Her Symbol
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
0
MM's Ask
J
$48-$55
Broker
• M lowers her ask to $49• Her limit is $48 but let's
see if we can get someone to buy it for $49
B = ASK
M
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
0
MM's Ask
J
$48-$49
J's Bid
$49 That's good enough
for me
Broker
• J uses C to raise his bid to $49
J
C = BID
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
MM's Ask
J$49-$49J's Bid
Highest Bid = Lowest Ask
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
$49-$49$49$49$49$49 1
J buys from M @ $49Trade
TradeData
Broker’s Sheets
• J and M each record the transaction.
J’s Broker Sheet
• J’s client is the buyer
J
$49 $50 $ 1M
J uses the BUY side of his sheet
• J turns the order over to indicate that this client’s order has been filled
• Now he will be issued new orders from other clients
Broker J
BUY LIMIT 50
C F
Buy me a share of stock, butdon't pay more than
$50
If your order is completed, you will receive a $1 commission
M’s Broker Sheet
• M’s client is the seller
M
$49 $50 $ 1J
M uses the SELL side of her sheet
• M turns the order over to indicate that this client’s order has been filled
• Now she will be issued new orders from other clients
Broker M
Limit Order
SELL LIMIT 48
C F
Sell a share of stock for me,but don't sell for less than
$48
If your order is completed, you will receive a $1 commission
Bid-AskOpenHighLowLast
Volume
$55$54$53$52$51$50$49$48$47$46$45
… TRADE…$55$54$53$52$51$50$49$48$47$46$45
ASK: I will sell atSTOCK EXCHANGEBID: I will buy at
Mock Trading Session
(1) S,(2) M,F(3) N,D,T(5) R,G,C,W,Z
$50-$52$49$53$48$51
24
(1) A,(1) J,(1) Z,(2) U,B(3) E,H,P(2) Q,V
Broker’s Sheets
• At the end of the session J’s Broker Sheet looks like this
• His sells are on the other side
$49$48$48$50$51$52$49$47$47$47$48$50
$50$48$49$51$51$52$50$50$48$47$49$50
$1
$1$1
$1$3$1
$1
MQHGMACGPRMV
J
12
$9
J
• J is a great broker
MOCK TRADING SESSION
Finance ClubUniversity of Illinois
Technical Notes
• I>clickers can accept 400 clicks from 400 clickers pretty much at the same time so congestion is not a problem
• However, I>clickers were designed to answer a question and then accept confirmation that the answer was received…
• You must wait for the confirmation before you click again.
• If you just keep clicking it will interfere with the ability of the clicker to receive confirmation and clear for the next click.