Stock Market Game Round 2 (What can you do with $10,000 in three months)

[jyro]

that will be one of the first mistakes that actually will make me money

fake money anyway. Let me get this straight, I shorted VLO at 53.40 ( thinking I was selling it), today it closed at 51.50 so tomorrow if it drops more, I can buy back to cover and make the difference?

[slow99]

when you short a stock in the game, how long is it for? I wanted to sell 5000 to get even on my credit, I only saw the option to "sell short" so what happens at the end of the game to those shares?

You're short a stock until you buy it back to cover it. I imagine it just marks you to market at the close of the game just like a long.

[jyro]

when you short a stock in the game, how long is it for? I wanted to sell 5000 to get even on my credit, I only saw the option to "sell short" so what happens at the end of the game to those shares?

[slow99]

So for those doing small investments ($200-$500 a month). What site are you using? Etrade, TD Ameritrade, Scott?

The problem with making investments that small is that the commissions will eat you alive. If you open a $200 position and it will take you around 10% return to simply cover the commissions on it.

The problem I had with Scott trade was getting the money there to trade with, you can't use a debit card, you either have to pay with cash or check and use the mail or drop it off yourself.

You can do an electronic transfer with Scottrade. I use Fidelity and have never had an issue.

[jyro]

Others here are much more knowledgeable than I about the places to trade

[jyro]

I use Fidelity, used Scott trade too

So for those doing small investments ($200-$500 a month). What site are you using? Etrade, TD Ameritrade, Scott?

The problem I had with Scott trade was getting the money there to trade with, you can't use a debit card, you either have to pay with cash or check and use the mail or drop it off yourself.

If you decide to go with Fidelity, talk to a agent and see if they will give you some free trades for opening an account. I could get free trades for a referral but it's too much hassle. Scott trade and Fidelity both have good stock and fund analysis pages.

[1carcrazyguy]

So for those doing small investments ($200-$500 a month). What site are you using? Etrade, TD Ameritrade, Scott?

[jyro]

ttt

[jyro]

I think I lost track of the game goal you set to begin with, " how much can you make with $10,000" in 90 days ", it's a paraphrase. In retrospect, I should have kept playing it like it was.
I used it as a learning tool but what I found was if their is no consequence of loss, you tend to be lots more liberal with your investments. I watch stocks, and have several watch lists , refiners, top funds, and a possible "to buy list" and as the stock moves, I move it up to my "future stocks to buy list". Like I said at the start of the game, I have a lot of time to sit in front of a computer in the winter time. It's helped my IRA.

Thanks for all the reply's to my questions. When it comes to the stock market, I'm still in a fog with most of it.

[SVT Lurch]

Many didn't use it. I did.

I used it...to my own detriment. I did learn why you don't go all in at once. I shorted Twitter with all my available cash/credit at $45 and it's pretty much gone straight up from there. Slight drop lately, but I'm not hopeful it will save me before the end of the game (or at all).

Next game we should see what others are buying early on liking plug but had a bad experience with fuel cell stock

That was turned off early on because people just try to copy each other when they can see what they are buying.

[03mustangdude]

I sold at 4.02 bought in at 2.00- 2.05 last Thursday. What I don't understand about other players is, the money is free, no risk, why not go ahead and use all the assets like the $10,000 line of credit. Many didn't use it. I did.

It was still just luck to choose Plug.

Next game we should see what others are buying early on liking plug but had a bad experience with fuel cell stock

[CWO]

[slow99]

so 'all in' is bad?

If you leverage and don't beat your cost of borrowing, yes, it's worse than not using it. If you use leverage and beat your cost of borrowing, then it's good.
The loss example is 2 posts above. The gain example is:

Start with $10,000, buy $10,000 of stock. It doubles - you have $20,000 and made $10,000.

Start with $10,000, leverage and buy $20,000 of stock. The stock doubles - you now have $40,000 worth of stock when you started with $10,000. Pay off the $10,000 loan and you have $30,000 when you started with $10,000 - a 200% return compared to the 100% return without borrowing.

[CWO]

so 'all in' is bad?

[slow99]

I sold at 4.02 bought in at 2.00- 2.05 last Thursday. What I don't understand about other players is, the money is free, no risk, why not go ahead and use all the assets like the $10,000 line of credit. Many didn't use it. I did.

It was still just luck to choose Plug.

I think many are trying to use the game as an actual learning tool instead of just going balls in on something and hoping to win a game.

That line of credit is margin. You have to beat your cost of capital (margin interest rate) on your investment to benefit. If you don't beat your cost of leverage you magnify your losses - instead of losing $5k, you'd lose $10k, etc.

If I had $10,000 in equity and bought $10,000 worth of a stock and that stock went to zero I'd lose my investment and have zero. If I fully margined and went to $20,000 in equity backed by a $10,000 margin loan and that stock goes to zero, I not only have lost my $10,000 - I'd now owe an additional $10k on top of it.