FINA351, Investment Project #1, (Invest1)
(Note: this assignment is due no later than midnight on Thursday, October 29)
In this assignment, you will invest $100,000 of fake money during the remainder of the quarter by playing
a free internet investment game. If you wish, you may work in teams of no more than two people. At the
end of the quarter, the top five portfolios will receive bonus points (25, 20, 15, 10 and 5 points,
respectively), based on the rankings the night before the final exam.
GETTING REGISTERED (CREATING AN ACCOUNT)
To get started, try the link below first. For a username (member ID), use a fictitious name if you do not
want the rest of the class to know your portfolio ranking. The email address entered must be legitimate.
The rest of the personal info can be bogus. The game password is “fakemoney” (all one word, lowercase).
http://www.investopedia.com/accounts/login.aspx?returnurl=http://www.investopedia.com/simulator/game/joingame.aspx?GID=325726&PW=fakemoney&Re
gLink=Simulator_Invite_Private
If the above link doesn’t work, create a new account using the link below:
http://www.investopedia.com/accounts/login.aspx?returnurl=http://www.investopedia.com/simulator/game/joingame.aspx?GID=325726&PW=fakemoney&Re
gLink=Simulator_Invite_Private
After registering with the online simulator, you should join the private game named “FINA351” (all one
word). Note the little sentence on the page that states “View other games.” Use the search feature to find
the game. The game ID number is 325726 and the password is “fakemoney” (all one word, lowercase).
Before you proceed further, make sure that you are logged in to the game FINA351 and not any of
the other default games.
RULES FOR INVESTING
You’ll start off with $100,000 cash. The goal right now is to invest at least half of your money in stocks
or options. The cash account will earn interest of 1% APR if not invested elsewhere. You will pay a
healthy commission each time you trade ($19.99 for market orders and $29.99 for limit orders). You can
invest in common stock, preferred stock, and stock options (sorry, bonds are not available). You may also
invest with borrowed money from the margin account at 8%, and you may sell shares short. If you don’t
understand these terms or how to place an order, see the help menus for the game. Most of you will likely
just place simple market orders, which is very easy to do. (For more details of game parameters, see the
end of this document.)
You must invest your $100,000 according to these rules:
1. Using the “Trade A Stock” link, place a market order to purchase at least one share of each of the
Exchange Traded Funds (ETFs) listed in the table below. ETFs are funds that invest in the stocks in a
certain index, such as the Dow Jones Industrial Average (DJIA). Because ETFs directly reflect the
movement of the underlying stock index, they will help us track how well your portfolio performs
compared to the overall market. Therefore, you are to hold these ETF investments until the end (don’t
sell them).
Purchase at least one share of each of the following:
Ticker
Name
Description
th
DIA
SPDR DJIA Trust Units SE
1/100 of the Dow Jones Industrial Average
(Diamonds)
SPY
SPDR S&P500 Gr Shs (Spiders) 1/10th of the S&P 500 index
QQQ
PowerShares QQQ Series Shs
1/40th of the largest 100 non-financial stocks
(Qubes)
on the Nasdaq (mostly tech companies)
2. You need to purchase at least one call option contract (you may purchase many more if you want).
One option contract contains 100 options. Using the “Trade Option” link, enter the ticker of a wellknown company whose stock you think will go up in value over the next few weeks. Next, scroll
down until you find the drop-down box that says “Options” and select Dec-2015 as the expiration
month. Next, scroll down and select the link to a call option of your choice (doesn’t matter which one
at this point but it works better the closer the strike price is to the stock price). Finally, enter the
number of contracts you want to buy and select the market order (target price). Although most of you
may not be familiar with stock options yet, we will be covering this topic in a couple weeks and I want
you to get your feet wet by investing in at least one call option contract.
3. The rest of the investments are for you to choose, but must include common stock shares from at least
five additional corporations. Use the symbol lookup feature if you don’t know the ticker symbols.
Click on Trade A Stock link, and then enter the symbol, number of shares, and type of order (e.g.
market, limit, stop).
IMPORTANT: You should initially invest at least half of your cash in stocks/options (should not have
cash > $50,000 remaining). Try to pick stocks that might do well (with dividends or capital gains)
over the coming weeks. You should likely choose the stocks of companies you are familiar with (e.g.,
sell products/services you use and therefore can follow with some interest, such as Starbucks, Apple,
Netflix, Amazon, etc.)
WHAT TO TURN IN
Send an email no later than Thursday midnight to fina351@wallawalla.edu that includes your real name(s)
and your game username. If you are playing on a team of two, make sure to indicate the real names of
both team members. From now on, you can trade stocks/options as much as you want, subject to the rules
listed above. At the end of the quarter, we will find out who the savvy (lucky?) investors are. Happy
investing.
Details of Game Parameters
Game Name: FINA351
Game Type: Private
Starting Cash: $100,000.00 USD
Margin Trading: Yes
Short Selling Yes
Options Trading: Yes
Game Rules
Allow Late
Entry:
Yes
Margin Interest:
8%
Allow Trade
History
Viewing:
Yes
Cash Interest:
1%
Allow Portfolio
Viewing:
Yes
Commission - Market:
$19.99
Allow Portfolio
Resetting:
No
Commission - Limit:
$29.99
Market Delay:
20 Minutes
Commission - Option:
$19.99
Daily Volume:
N/A
Commission Per Contract:
$1.75
Option Daily
Volume:
N/A
Diversification:
N/A
Diversification Option:
N/A
Minimum Stock for Margin:
N/A
Quick Sell:
15 Minutes
Minimum Price:
N/A
Minimum Price
Short:
N/A