Stock Market Simulations on the Web
There's no doubting that the rise of the Internet has had a significant effect on the stock market. Online trading has become a singular phenomenon in and of itself: some argue that it has helped to democratize the market, letting individuals make their own trades without having to go through a broker; others claim that it's leading to anarchy, as poorly informed would-be moguls buy and sell stocks at whim. The dispute over the relative merits of online trading is likely to continue for quite a while; what is not in dispute, however, is the fact that online trading has helped lead to an unprecedented amount of stock market information being available on the Web today to the general public, including to up-to-the-minute (or only slightly delayed) stock quotes and information. Teachers can use this information to have students engage in stock market simulations that have a high degree of realism. Though any type of simulation can benefit from quick and easy access to current stock information, there are a few sites on the Web that offer actual stock market or stock market-type online simulations either for free or for a minimal charge. This article looks at some of the better Web-based simulations.
Part of UISES (University of Illinois Securities Exchange Simulation) from the University of Illinois-Chicago, this simulation uses real-time stock data and can be easily adapted for students in grades 5 and up. Teachers begin by choosing one of two methods by which to conduct the simulation:
- In the first, the teacher is the stockbroker; students research which stocks they want to buy or sell, then place their orders with the teacher. This method works best for one-computer classrooms and situations where students' time online is limited.
- In the second, the students themselves are the brokers, and they conduct all transactions. This method works best in computer labs or situations where students have plenty of access to the Web.
Another consideration: it costs $5 to register each individual student investment account, so teachers may want to have students work in teams to limit the cost of participating in the simulation.
When trading, students can choose from over 10,000 issues on the New York and American Exchanges as well as NASDAQ, including stocks, warrants, ADRs, and Closed End funds. Other features, as listed on the site:
- Market, Limit, Stop and Stop Limit Orders.
- Automatic dividend calculation on ex-date and credit on pay-date.
- Automatic stock dividend calculation with partial shares credited in cash equivalent.
- Searchable dividend data base with ex-date, record date, pay date, and amount.
- Automatic stock split and consolidation processing.
- Searchable data base on splits and consolidations with split factor and ex-date.
- Statement download to HTML and spreadsheet.
- Trade orders are submitted for execution at market closing prices.
Teachers can also customize the simulation by adjusting a number of parameters, from minimum and maximum amounts to interest and commission rates. The site also provides a secures chat area where students can interact and share information.
Finally, there are support materials available at http://www.ncsa.uiuc.edu/edu/RSE/RSEyellow/gnb.html, including lesson plans for English, math, and social studies classes, a lesson on stock market basics, introductory activities, reproducible forms, and links to stock market information on the Web.
An innovative site that channels people's interest in the movies into a straightforward but detailed stock market simulation. The basic idea works like this: Individual movies are made into stocks, complete with a five-letter trading code (e.g., the recent box-office hit "The Matrix" was MATRX). The price for each stock is based on how many millions of dollars HSX traders believe the movie will earn during its first four weeks at the box office: for example, a movie stock valued at $H80 (this means 80 Hollywood Stock Exchange dollars) is expected to earn $80 million. There are five categories of movie stocks: Concept (movies rumored to be made, but not officially okayed by a studio yet), Development (a studio has committed to make the film ,but production has not yet begun), Production (the movie is currently being filmed), Wrap (Filming has finished, but the film has not yet been released), and Release (the movie is currently playing in theaters). Movie stocks are "delisted" (cashed out) after they have been in wide release in theaters for four weeks. There are also "StarBonds" geared to individual actors and directors, with values based on the person's average box office performance over the past three years. These bonds have ratings ranging from AAA (average is over $100 million) to U (Unrated--$5 million or lower). Other types of investments available include Funds (portfolios of movie stocks based around a specific theme such as DreamWorks productions or science fiction films), Options (HSX sets a "strike price" which it believes will equal a film's opening weekend grosses; traders can choose a "call" option if they think a movie will do better than the strike price or a "put" option if they think it will do worse), and Stop orders that automatically buy or sell stocks when they hit a certain price.
The simulation is free, but requires registration (a user name and password are needed to conduct any transactions). New accounts receive two million $H, which are deposited in a virtual savings account that earns interest. An automatic 1% commission is subtracted from a user's account for each transaction ordered. The site also has a glossary of terms, a news page, and fictional experts like "Max Broker" who offer advice on hot stocks and bonds.
Similar in concept to Hollywood Stock Exchange, but instead of movies and movie stars, stocks are based on professional athletes in basketball, baseball, football, hockey, and golf. Athletes' prices on the exchange fluctuate based on statistical performance, as well as the buy and sell activity of the market. For statistical performance, an athlete's current year performance will be evaluated against their estimated statistical performance. If the athlete exceeds his estimated statistical performance, his price will increase, and visa versa. Each sport has different statistical criteria. The site provides detailed information on each athlete, including both playing statistics and a history of how his stock has performed in terms of value and volume. Compared to HSX, this simulation is less complex in terms of the number of stock market-type transactions available (other than basic buying and selling, the only other market-type feature is occasional stock splits), but the way in which stock values are determined is much more involved, since it takes several sports statistics into account. Consequently, this site might be a better choice for teachers who want to have their students practice math in addition to learning about the stock market. This simulation is also free, and also requires registration (user name and password). New accounts receive $1,000,000. The site also has a glossary, chat and message boards so users can exchange information, a daily news report, and detailed charts and tables that track a user's trading history.
Good for students who don't have a great deal of familiarity with the stock market, this ThinkQuest site introduces only the simplest features of buying and selling stocks. Students can begin by learning about what sort of information investors should have before buying a company's stock. To provide examples of this, profiles of nine major corporations (Coca-Cola, Sierra Online, Microsoft, Barnes & Noble, McDonalds, Nike, Toys 'R' Us, Home Depot, Netscape), present an overview of each company, briefly trace its history, give the name/age/salary of top executives, and display two charts showing the company's U.S. sales and recent stock performance. A tutorial then discusses the history of the stock market, goes over basic concepts, and offers a glossary of stock terms. Finally, a free simulation (registration required) starts users with $100,000 and lets them buy and sell stocks (current prices are given, delayed 20 minutes; no commission fees are charged). Two handy search features let users look up a company's NYSE symbol by typing in the company's name, and give current quotes on prices for any stock. Individual portfolios are password-protected.
Also from ThinkQuest, this site offers a simulation that is more involved than EduStock. Users can begin by proceeding through a tutorial on investment basics that discusses a number of general topics, including savings, buying on credit, calculating rate of return, investing risks, compound interest, and retirement funds. Next, users can work through the "Investment Lessons" section, which starts off with a 15-question multiple-choice quiz based on the information from the tutorial, then moves on to cover more advanced topics such as assets (financial vs. physical, diversification), stocks (types, how to research a company, means of analysis, factors to consider when picking a stock, indexes, options), mutual funds (types, open-end vs. closed-end, index funds, factors to consider when choosing a mutual fund), bonds (types, bond funds, ratings), securities (NYSE, NASDAQ, brokers, the SEC), and tax and investing (401k, IRA, Keogh plans).
After completing these lessons, students should be ready to tackle the simulation: A Library of data and articles from financial publications helps users pick stocks. Meanwhile, a research database contains profiles and histories of over 5000 companies; users can search for a specific company by entering their name or stock symbol, or they can browse companies by industry, links to the StockMaster site, which provides current quotes (delayed 20 minutes) and earnings charts, detailed quotes, and (when available) news, profiles, SEC filings, and earnings history.
The site also has real-life examples of teenagers who have successfully invested in the stock market, a Financial Goals Calculator that lets users see how adjusting different factors (goal in dollars, initial investment, monthly investment, return on investment percentage) can affect yearly total investment gains, and a message board that lets users exchange information.
CNN's financial site has the latest business news, quotes from both the U.S. and world stock markets, currency exchange rates, bond market information, a personalized portfolio manager (free registration required), a special section devoted to technology stocks, and other information. It also offers free stock market simulations (administered by http://sandbox.com; registration required) that run for three months at a time. Users can buy and sell stock, get detailed quotes, access historical price charts and conduct research.
When buying or selling stocks, they use realistic order forms like those utilized by major online brokerages, and can issue 14 combinations of trade orders, including short selling, stop orders, and limit orders. Detailed portfolios track performance and keep a history of all transactions.
Founded by Cornell and Stanford University alumni (and intended primarily for college students or advanced high school classes), this simulated securities broker (no charge; registration required) provides mock trading of all securities listed on the major U.S. exchanges. It only allows users to make trades between 9:30 AM and 4:00 PM EST-the same limitation placed on real brokers. Users begin with $500,000 and are charged a flat commission fee for all stock transactions. Any uninvested cash earns money market fund interest; short selling is also available. The site's home page posts real-time data showing the levels of the Dow, NASDAQ, the S&P 500, and the Russ 2000, and also allows users to obtain quotes, look up a company's symbol, and place quick buy and sell orders. There is also an investment guide composed of articles on topics ranging from investment strategies to the tax code to specific information on bonds, mutual funds, real estate, technology stocks, stock analysis, and more.
Other notable sites that provide stock market information:
The New York Stock Exchange
http://www.nyse.com
Here, users can find current stock quotes and a lot more, including a complete listing of NYSE companies, brief looks at the different types of market regulations, a history of the stock exchange, information on international trading, and an education page at http://www.nyse.com/public/educate/6a/6aix.htm, which offers an overview of the stock market and multiple-choice online quizzes.
AMEX/NASDAQ
http://www.amex.com or http://www.nasdaq.com
In addition to current quotes, this joint site also lets users look up a company's stock symbol, and provides current financial news.
U.S. Securities and Exchange Commission
http://www.sec.gov
All anyone needs to know about how the SEC regulates the stock market can be found here. There is also an Investor Assistance section that has a mutual fund cost calculator, facts on saving and investing, tips for online investing (including a guide on how to avoid Internet stock frauds), a financial facts toolkit, and more.
The Motley Fool
http://www.fool.com
Irreverent but insightful advice from the court jester of the financial world. In addition to stock market info and investment tips, the site also presents articles on the latest happenings in business, discusses personal finance issues, and lets registered users (no charge) have access to special message boards and create online portfolios that help them track their stocks' performance.
Reuters MoneyNet
http://www.moneynet.com
In addition to the latest market reports, stock quotes, and business headlines, users can find stock performance histories and summaries of market trends. There are also links (when applicable) to other Reuters news stories.
The Wall Street Journal
http://www.wsj.com
Stock quotes, market updates, and in-depth business reporting from the best known name in financial news. One note: many areas of this site are accessible to subscribers only (fee required).
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