FIN 102 - Virtual Stock Exchange

Purpose
The purpose of the Virtual Stock Exchange is to give you a better understanding of
trading strategies and portfolio management. You will also learn a variety of financial
instruments and their risks and rewards as they apply to asset management.

Project Overview and Goals

Acting as a prospective portfolio manager, you are being entrusted with $100,000
(virtual only – this is not real money) to invest at your discretion for a period of
approximately 4-7 weeks (depending on Block or Semester course).

Your goal is to invest this money wisely and profitably and to obtain a high rate of return
while keeping risk low.

Your rate of return will be ranked against other asset managers (your classmates)
according to the success of their portfolio management. You will be able to track how
you are measuring up throughout this exercise.

Specifically, the goals involve the following criteria:

Returns:

• Absolute return: The total dollar increase in the portfolio over the trading
period.

● Risk-adjusted return: The return on the portfolio considering the level of risk
assumed by you.

Registration
First, be sure to register for the game. Registration is free.

[Note: once you are registered, your instructor will give you a specific URL or Login
information for you to find and login to the “game” for this course. Look for information
that is posted in Canvas, within the module for this Block or Semester game information.]

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Portfolio Management Constraints
● You should invest most of your portfolio into the market.
● Cash must not exceed 10% of your portfolio at any time. We want you invested, not
sitting on the sidelines. In other words, you should have at least 90% of your
money in the market, working for you.

Sources of Information for Portfolio Managers

Sources that you may find to be particularly valuable for your research include:

● MarketWatch: http://www.marketwatch.com/
● Investopedia: https://www.investopedia.com
● Google Finance: https://www.google.com/finance/
● Wall Street Journal: www.wsj.com
● Yahoo Finance: finance.yahoo.com
● Daily Treasury Yield Curve Rates: http://www.treasury.gov/resource-center/data-
chart-center/interest-rates/Pages/TextView.aspx?data=yield
● Finviz: https://finviz.com/screener.ashx
● TDAmeritrade Thinkorswim: https://www.tdameritrade.com/tools-and-
platforms/thinkorswim.html

Enter your positions

Type the company name (or ticker symbol) into the “Symbol Search / Trade” window within the
“OVERVEW” tab, then click on the blue “TRADE” button:

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In the following window that opens up (“Trade Order”), type in the number of shares you wish to
buy, then click the blue “SUBMIT ORDER” button in the bottom right corner. Questions to
ponder:

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 Questions to ponder
During the course of this contest, and after, you may be asked to address the following:

● What is a market order?

● What is the difference between a “GOOD TIL CANCELED” order and a “DAY ORDER”?
● What does it mean to “Sell short”?
● Why did you choose what you chose?
● What tools or resources did you rely on? Why?
● Which positions exceeded your expectations? What conditions caused this?
● Which positions underperformed for you? What factors created the performance
gap?
● What are the key things you learned from your Virtual Stock Exchange
experience?
● How will your Virtual Stock Exchange experience influence your personal
investing in the future?

Use sites like Investopedia to find definitions of terms.

Have a great time playing the virtual stock game, MarketWatch.