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MOCK TRADING SESSION

MOCK TRADING SESSION. Finance Club University of Illinois. Personal Shopper. Go buy me a 10 second car. 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. Personal Shopper.

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MOCK TRADING SESSION

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  1. MOCK TRADING SESSION Finance ClubUniversity 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 … a blue one … but don't pay more than $93,000 Porsche Cayenne Turbo

  5. Personal Shopper = Broker Go buy me a Porsche Cayenne Turbo • 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 … a blue one … but don't pay more than $93,000

  6. Limit Order Go buy me a Porsche Cayenne Turbo … a blue one … but don't pay more than $93,000 You're my new best friend My client is now $3,000 happy Porsche Cayenne Turbo Fully Equipped $90,000

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

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

  9. Broker Buy Nike (NKE) Limit $50 • 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

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

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

  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. Mock Trading Session J's Bid J 0

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

  15. Mock Trading Session Oops. Too High J's Bid J J J J J J J 0

  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. Mock Trading Session J J J J's Bid J 0

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

  19. Broker Sell Nike (NKE) Limit $48 • 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

  20. Sell a share of stock for me,but don't sell for less than$48 F C Limit Order If your order is completed, you will receive a $1 commission SELL LIMIT 48 Client Order • The order comes in to broker M

  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 Her Symbol M

  22. Mock Trading Session M M's Ask $48-$55 J 0

  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. Mock Trading Session $49 That's good enough for me M's Ask $48-$49 M J's Bid J 0

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

  26. Mock Trading Session M's Ask $49-$49 J's Bid Highest Bid = Lowest Ask J M

  27. Mock Trading Session Trade J buys from M @ $49 $49-$49 $49 $49 $49 $49 1 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 uses the BUY side of his sheet J M $ 1 $49 $50

  30. Buy me a share of stock, butdon't pay more than$50 F C If your order is completed, you will receive a $1 commission BUY LIMIT 50 Broker J • 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

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

  32. Sell a share of stock for me,but don't sell for less than$48 F C Limit Order If your order is completed, you will receive a $1 commission SELL LIMIT 48 Broker M • 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

  33. Mock Trading Session (1) S, (2) M,F (3) N,D,T (5) R,G,C,W,Z (1) A, (1) J,(1) Z, (2) U,B (3) E,H,P (2) Q,V $50-$52 $49 $53 $48 $51 24

  34. J Broker’s Sheets $50 $48 $49 $51 $51 $52 $50 $50 $48 $47 $49 $50 M Q H G M A C G P R M V $49 $48 $48 $50 $51 $52 $49 $47 $47 $47 $48 $50 $1 $1 $1 $1 $3 $1 $1 • At the end of the session J’s Broker Sheet looks like this • His sells are on the other side 12 $9

  35. J • J is a great broker

  36. MOCK TRADING SESSION Finance ClubUniversity 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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