Stock Market Game
Table of Contents
Preface ................................................................................ 1
Table of Contents ................................................................ 1
Trade Masters Guide ................................................................ 2
Introduction ........................................................................ 2
The Game ........................................................................... 2
Creating the investors ......................................................... 2
Creating the companies ....................................................... 2
Cards ................................................................................... 2
Market round ...................................................................... 2
Investors Handbook .................................................................. 3
Introduction ........................................................................ 3
Creating the investor ........................................................... 3
Companies .......................................................................... 3
Cards ................................................................................... 3
Market round ...................................................................... 3
Financial reports ................................................................. 3
Company Manual ...................................................................... 4
Creating companies ............................................................ 4
Company examples ............................................................. 4
Event examples ................................................................... 4
Update examples ................................................................. 4
Rumor examples ................................................................. 4
Appendix – Tables ..................................................................... 4
Table 1 – Random Market Fluctuations .............................. 4
Table 2.1 – Stock Sales Influence by Rank ......................... 4
Table 2.2 – Stock Sales Influence by Shares ...................... 4
Table 2.2 – Stock Sales Influence by a Shares Formula ..... 5
Table 3 – Example Market Table ........................................ 5
Preface
The following is a collection of rules and guidelines for running an
interactive stock market simulation. Despite the high-level nature of the topics
covered, it requires very little prior mathematical knowledge. It will develop
students’ skills through high level decision making in a simulated environment.
People of all ages will be challenged by these lessons, from preschool to PhD. The
assignments tackle all levels of Bloom’s Taxonomy, and are aimed at several of the
intelligence types identified by Howard Gardner. Through self discovery, students
will learn their method to complete the assigned tasks, and will directly see the
results of those decisions. Parents are encouraged to complete these lessons with
their children for additional reinforcement.
There are several stock market simulations available on the Internet. The
level of detail in the simulations are considerable, including computer software
integration and using actual stock values from the Wall Street Journal. The
simulations are generally complex in nature and require a substantial amount of class
time and organization to be successful. While the complexity of an ongoing stock
market project is a worthy goal to overcome, this set of rules hopes to increase
enjoyment and motivation through simplicity of instructions. The game duration is
flexible to allow for any length of time. It could be used as a one- or two-day
project, or could be expanded to use approximately 10 minutes of every class period
to give an ongoing effect over time.
As written, these rules require only simple mathematical skills. Stock
processes such as buying, selling, and fluctuations are learned in the process of
playing the game. Teachers are encouraged to use the rules modifications in the
appendix to incorporate fractions, decimals, and other more complex topics.
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Trade Masters Guide
Introduction
This game is designed to parallel the Advanced Dungeons & Dragons books
by E. Gary Gygax. While AD&D was created to simulate a world of fantasy and
adventure, SMG mimics a financial ambiance. Participants can experience role
playing within a fun, challenging, and safe environment. SMG is not a strategy
game like chess or checkers. It requires thoughtful and organized supervision. That
job rests upon you, the TradeMaster (TM). You will create the simulated world in
which the participants will dive in head first. Investors will succeed and fail based
on the progress of a company unfolding.
Initial investment
To start the game, the TM must decide how much investors can spend on
the stocks available. Fairness would dictate that all investors start with the same
amount of money. However, life can be unfair even in a simulated world. There
may be reasons to award different amounts of money for the initial investment, such
as a reward for doing well on the character profile.
Creating the companies
The Game
Just as investors need a solid description, the world needs detailed
companies. These may be provided by the teacher or created as an in-class exercise.
Information such as the name, products, and history will add to the environment and
help investors make useful decisions on the stocks to purchase. A list of example
companies is provided in the Company Manual.
Details
Cards
A convincing simulated world rests in the details. Investors must believe,
on some level, that their decisions have a direct influence on their success and
failures. The more details a TM can add to a world, the more integrated participants
will be.
Event and update cards
In order to create a believable campaign, the world must change. Events
must occur and modify over time. This is simulated through evens and updates. An
event card indicates a new occurrence or issue taking place. An update card gives
additional information on a prior specific event. Through these cards, an everchanging world will develop over time.
Rules as guidelines
SMG provides merely a set of guidelines for designing and running a
campaign. It is up to the TM to decide which rules are appropriate at the time.
There are limitations to any simulated environment. These rules will serve as a
starting point for the TM. There may be a point where the TM is no longer
necessary, and the game can run itself without intervention.
Random Occurrences vs. Decisions
There will be times the TM will need to make a decision on some particular
conflict. One simple way is to determine randomly the result, either through flipping
a coin, rolling dice, or playing rock-scissors-paper. But creating the random
determination is still merely a decision. If time is a factor, it is quicker to make the
decision and move on with the game. Investors may question the logic of the
outcome, but a decision must be made. “Because the TM said so” may not be the
nicest of responses, but it is necessary in some cases.
Rumor cards
Investors will have some influence over stock market other than choosing
which companies to invest in. Investors may spread rumors through the use of
rumor cards. They simply submit their completed rumor cards to the TM, who then
determines its relevance and appropriateness.
Market round
Creating the investors
A round of market activity consists of a series of phases. The following is
a suggested order to start off a campaign. The TM may find it appropriate to add,
remove, or modify the phases.
1. Pre-Market Announcements
2. Market
3. Random market fluctuations
4. Post-Market Announcements
Character profile
If this is to be a role playing environment, then participants must create a
character profile for their fictitious investor. Details such as career, marital status,
and prior accomplishments can be included. This would be particularly useful as
part of an English composition lesson. If the character profile is left out of the game,
participants simply play within a simulated environment.
Pre-Market Announcements
Events, updates, and rumors occur simply by the TM making
announcements to the financial community. Tn the first phase, a certain amount of
the total event, update, and rumor cards are read allowed to the investors. Half is
always a good number, that that is flexible. It is during these announcements where
the grapevine is most active.
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Market
During this phase, investors will conduct their stock transactions based on
the information gathered. It may be useful to introduce the game using only the
random market fluctuations provided in the Appendix. Once investors understand
the meaning behind profit and loss, more high-level concepts can be covered about
what causes fluctuations.
Random Market Fluctuations
In order to keep the market changing, stocks need to rise and fall
independent of the purchases from the investors. To simulated, apply the Random
Market Fluctuations table. This will give a constant sense of flux to all stocks, and
throw some potential surprises into the game.
Post-Market Announcements
After the market closes, the remaining cards are read allowed to the
investors. Some will be surprises that affect future stock values, others will be
rumors of what is already known.
The Grapevine
Before the cards are read before the round, there is time where investors can
look at a specified number of cards. Time is given where investors can mingle and
talk about what they saw. This is also an opportunity to spread rumors about a
company. Investors are free to be honest or deceitful in the information they give to
other investors. Investors may also submit rumor cards to be read from the card
table.
Determining the closing price
Stocks rise and fall according to how much is purchased or sold. In the
appendix are tables to determine the investors’ direct influence over the market.
Each fouses on a different aspect of the market data.
Reading cards
Much of the enjoyment of the game rests in how the cards are read. Cards
read with excitement will be much more energetic than monotone readings. It may
also be fun to let the investors do the announcements.
Investors Handbook
Introduction
Creating the investor
Name and description
Background
Initial assets
Investors will be given an equal (or unequal, at TM’s discretion) amount of
money to invest in stocks. They may spend all of this money, or keep some around
for further investments.
Companies
Bankrupt companies
If a company’s stock value ever reaches $0, the company folds and all stock
is worthless.
Mergers
Two companies can merge. This gives all shareholders of either company
shares. Whether this increases or decreases the value of the stock remains to be seen.
Cards
Event and update cards
Significant fluctuations in the stock market are caused by specific events, as
determined by the game. Every round, a certain number of cards are played. The
cards may either be provided or be created by the students as part of the activity.
Event cards indicate a new event is taking place, while update cards give further
information on a past event. Note that the event and update cards do not specify
whether the event is beneficial or harmful to the company in question, only the facts.
Rumor cards
Market round
Financial reports
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call “the next
generation of Legos”.
Company Manual
Creating companies
Rumor examples
Company examples
Name
Symbol
Poultry in Motion
Weyland Yutani
Benthic Petroleum
Disco Technologies
Icy University
Yatto
MilkShake Software, Inc.
Creepy & Stinky
Stock Market Chronicle
S’Nedden Skin Research
PiM
Wyu
BPt
DTk
IcU
YTO
MSI
C&S
SMC
SSR
Purpose
Value
Chicken distribution
Air processors
Gasoline and Oil
Music recording technology
Police investigation training
Toy manufacturer
Software development
Cartoon entertainment
Business reporting periodical
Medical research
$42
$16
$173
$84
$30
$51
$119
$11
$52
$33
Event examples
Event
Poultry in Motion is
being sued by local
rabbi for delivering
diseased chickens.
Event
Event
Weyland Yutani submits
a patent for a more
efficient method for
compressing air in a
zero-gravity
environment.
Disco Technologies
sides with Snapplester
against Courtney Love
in upcoming copyright
supreme court case by
providing legal aid and
court evidence.
Event
Event
Event
Benthic Petroleum
signs a contract with
Nigeria to import $40
million worth of crude
oil.
Icy University hires
Howard Dean as chair of
the political science
department.
Yatto releases a toy they
call “the next
generation of Legos”.
The court case
between Poultry in
Motion was settled out
of court for an
undisclosed amount.
Update
Benthic Petroleum
Rumor
Rumor
Weyland Yutani’s zero
gravity air compressor
project was just to make
the patent in their name,
and never had any
intention of designing or
engineering them.
Disco Technologies
client base as fallen as
a direct result of their
side in the Courtney
Love v. Snapplester
conflict.
Rumor
Rumor
Nigeria is selling oil
purchased through
illegal funds, and thus
Benthic Petroleum is
involved in an
internationally illegal
conflict.
Howard Dean is going to
hire all new faculty and
staff in the political
science department at Icy
University to incorporate
his vision.
Update
Yatto’s GeoFaces are
best things on the
market! They are
selling like hotcakes!
Appendix – Tables
Table 1 – Random Market Fluctuations
d20
1
2-3
4-7
8-13
14-17
18-19
20
(5%)
(10%)
(20%)
(30%)
(20%)
(10%)
(5%)
2d6
2
3
4-5
6-8
9-10
11
12
(2.8%)
(5.6%)
(19.4%)
(44.4%)
(19.4%)
(5.6%)
(2.8%)
Result
Change
Large loss
Medium loss
Small loss
No change
Small gain
Medium gain
Large gain
-3d6
-2d6
-1d6
-+1d6
+2d6
+3d6
Table 2 – Stock Sales Influence by Shares
Update examples
Update
Rumor
Poultry in Motion
purposely diseased the
chickens, and thus are
settling the case to
keep the bad press to a
minimum.
Update
Weyland Yutani’s zero
gravity air compressor
project is tabled until a
suitable market can be
targeted.
Update
Icy University
Update
Disco Technologies
This method uses the company’s closing sales directly to determine the new
value. The definitions of high, medium, and low will need to be determined.
Update
Yatto releases a toy
called GeoFaces they
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Sales
Result
High sales
Medium sales
Low sales
No change
Low purchases
Medium purchases
High Purchases
-3d6
-2d6
-1d6
-+1d6
+2d6
+3d6
Table 3 – Stock Sales Influence by a Shares Formula
This method has the advantage of independence, but the new value is
calculated using a formula rather than looking it up in a table. Formulas need not be
complex to be effective, and multiple formulas can be applied.. A very bold
simulation of the market could apply this formula interactively during the market
process.
Formula
Result
1/±10
d6/±50
2d6/±100
For every 10 shares, stock value modified by 1
For every 50 shares, stock value modified by 1d6.
For every 100 shares, stock value modified by 2d6.
Table 3 – Example Market Table
This table gives an example of how stock purchases can be managed and
calculated.
Sales
PiM
WY
u
-10 -50 -8
-68
-0
DTk
IcU
YTO
-100 -100 -85
-34 -30 -18
-30 -10 -20
-15 -24
-50
MSI
-100 -50
C&S
SMC
SnR
-10
-25 -17 -11
BPt
Sales
subtotal
-367
-60
-39
-50
-150
-0
-10
-53
Purchases
+100 +75 +1 +10
+50 +14 +11
+100
+11 +13 +17
+4 +1 +1 +3 +1 +6
+100 +100 +250
+75 +25 +10 +10
+20 +10 +3
+30 +10 +11 +3
Purchase
subtotal
Total
+186
+118
+75
+75
+100
-267
+0
+41
+16
-60
+2
-34
+590
+440
+0
+33
+54
0
+23
+1
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