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MOCK TRADING SESSION Finance Club University of Illinois.

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Presentation on theme: "MOCK TRADING SESSION Finance Club University of Illinois."— Presentation transcript:

1 MOCK TRADING SESSION Finance Club University of Illinois

2 Personal Shopper Go buy me a 10 second car

3 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

4 Personal Shopper Go buy me a Porsche Porsche Cayenne Turbo … a blue one … but don't pay more than $93,000

5 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

6 Limit Order Go buy me a Porsche Cayenne Turbo Porsche Cayenne Turbo Fully 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

7 Limit Order Go buy me a Porsche Porsche Cayenne Turbo Fully Equipped $100,000 … a blue one … but don't pay more than $93,000 YOU'RE FIRED … AND I'M NOT PAYING!

8 Personal Shopper Go buy me a share of Nike … but don't pay more than $50

9 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

10 The order comes in to broker J Client Order BUY LIMIT 50 C F Buy me a share of stock, but don't pay more than $50 If your order is completed, you will receive a $1 commission

11 Broker J's Trading Symbol is at the bottom of the I>clicker J My Symbol Power On

12 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

13 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session 0J J's Bid

14 Broker Increase the bid by clicking on C C = BID J

15 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session 0 J J J's Bid J J J J J Oops. Too High

16 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

17 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session 0 J's Bid J J J J

18 Personal Shopper Go sell my share of Nike … but don't take less than $48

19 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

20 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

21 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

22 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session 0 M M's Ask J $48-$55

23 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

24 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session 0 M M's Ask J $48-$49 J's Bid $49 That's good enough for me

25 Broker J uses C to raise his bid to $49 J C = BID

26 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session M M's Ask J $49-$49 J's Bid Highest Bid = Lowest Ask

27 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume Mock Trading Session $49-$49 $49 1 J buys from $49 Trade Data

28 Broker’s Sheets J and M each record the transaction.

29 J’s Broker Sheet J’s client is the buyer J $49 $50 $ 1M J uses the BUY side of his sheet

30 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, but don't pay more than $50 If your order is completed, you will receive a $1 commission

31 M’s Broker Sheet M’s client is the seller M $49$50$ 1J M uses the SELL side of her sheet

32 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

33 BID: I will buy atSTOCK EXCHANGEASK: I will sell at $55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 … TRADE…$55 $54 $53 $52 $51 $50 $49 $48 $47 $46 $45 Bid-Ask Open High Low Last Volume 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

34 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 $50 $51 $52 $49 $47 $48 $50 $48 $49 $51 $52 $50 $48 $47 $49 $50 $1 $3 $1 MQHGMACGPRMVMQHGMACGPRMV J 12 $9

35 J J is a great broker

36 MOCK TRADING SESSION Finance Club University of Illinois

37 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.

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