Tallinn 10:00-14:00
Riga 10:00-14:00
Vilnius 10:00-14:00
Moscow 09:30-17:45
Stockholm 10:00-18:20
Helsinki 10:00-18:20

All times: GMT +2
2008-02-09 16:35:01
EUR/USD 0.6894
EUR/LVL 1.4362
EUR/LTL 0.2896
EUR/EEK 0.0639
EUR/SEK 0.1061
EUR/RUB 0.0279
Indices: / OMXR 0.00% / OMXV 0.00% / OMXT 0.00% / OMXS30 0.00% / OMXH25 0.00% / RTS 0.00%                     Stocks: AVAZ 0.00% / SCVB 0.00% / SCVA 0.00% / SCRIB 0.00% / SCRIA 0.00% / AVAZ 0.00% / SCVB 0.00% / SCVA 0.00% / SCRIB 0.00% / SCRIA 0.00%                     Porfolios: pantera 5.38% / Reliance 4.31% / AC 3.55% / Kraujas 3.48% / Vito 3.39%
 

Investment Game 2008 tutorial


Step 1: Register for Investment Game

Enter your login name in the registration form and press the submit button to register for Investment Game. Please consider that you need to choose a login name which is unique. After a successful registration, you will see a password, containing six numbers. It is a good idea to write this password down or save it for a while.


The first thing you will have to do after registration will be filling “My information” section. All fields need to be filled correctly in order to proceed further with the game.


You can change your password at any time in “My information” section. If you have forgotten your password, you can easily recover it in “lost user data” section by entering your valid e-mail address.


After finishing registration steps above you can go to “My portfolios” section and create a portfolio. To have a portfolio, you need to specify a portfolio name which still does not exist in the database. After entering a portfolio name please do not press “enter”, but use “add” button. You can have up to 3 portfolios. Portfolios cannot be renamed or deleted later in the game.


Now you are ready to invest! Read further steps for useful tips.

Step 2: Choose the stock you want to buy

Usually beginners are confused by the enormous amounts of numbers, graphs, company names and tickers. The common question arises, how do investors choose the right stocks from this chaos? The information about the companies is regularly published on financial web-pages, where, by the way, you can find particular market summaries to know general tendencies of the whole market. Keep in touch with recent news, companies’ reports and Market Overviews to identify the most promising companies.

The major source for information are the home pages of the stock exchanges:

  • OMX Group - for Latvian, Lithuanian and Estonian market. Just enter the trading symbol or name of the company in the “Search” field and you will be redirected to a page devoted to that particular company. Find a graph for last trading session, historical charts and general information about the company there.


  • Here, one can observe the statistics for whole market. Use this to see the top gainers/losers or most actively traded shares for a predefined timeframe.


  • Following this link you will find a list of companies listed on Swedish and Finish markets.


  • Russian Trading System's web page provides information for Russian market.

Useful information on Investment Game's web page:

  • Use weekly market overviews prepared by the group of students, members of Stockholm School of Economics in Riga Investment Fund. You always need to know the past before forecasting the future.


  • One more source of information is a running line at Investment Game web page. The information is presented in the following way: <6 indicies from each market one can trade in the game>, <top 5 shares which most lost in price during 1 day>, <top 5 shares which gained most during 1 day>, <top 5 portfolios which gained most during 1 day>. One can slow down the running line by pointing over it with a mouse.

Do not forget to follow the situation on the global markets! Here are the links for that purpose:


Links to the most popular electronical newspapers (in native languages for each country):


Visit these sites if you want to deepen your knowledge in investment and trading:


Step 3: Determine the order type

As soon as you have identified a reliable stock, decide upon the action considering it. There is not much to choose – only 4 options: buy, sell, sell short, buy to cover.
 
  • Buying operation is very straightforward. Use this option if you expect that at least in the nearest future the chosen stock price will increase. The only thing you should be worrying about if whether you have enough cash to buy at a particular moment.


  • Selling stocks is as easy as buying it. You being an investor want to sell at the highest price to maximize your profits. By choosing the right moment for selling operation you can achieve your goal.


  • Selling short goes a bit against the logic on how everyone is making money on stock exchanges – they buy low and sell high. However, there is a possibility to gain from downward movements of the stock price you have chosen. Selling short is an operation of selling the stock that you do not actually own yourself. By selling stock short, you are actually borrowing the shares from your broker and selling them, but then you have a liability to buy the shares back at some point and return the shares to your broker to pay off the loan of shares. Therefore, use selling short only if you expect that stock price will decline at least in the nearest future.

    Here is an example for you to understand. Suppose you have chosen the stock of company called ‘Cool’, whose price is 5 EUR at the moment. At the same time, you expect the price to decrease in a week tie to 4 EUR per share. Selling the stock short enables you to sell the stock at 5 EUR per share without paying it yourself. If you were right and stock actually price declined to 4 EUR, you simply buy back the shares you sold making 1 EUR profit per share.


  • Buy to cover is used for buying back the shares you have sold short previously. Hence, you can use buy to cover option only when you have sold something short. In the above described example, you would buy to cover shares of ‘Cool’ at 4 EUR per share.

Step 4: Choose the amount of shares to trade

In reality there are a lot of factors that might limit your trading volume. To keep Investment Game closer to reality, is also has some restrictions:

  • You are not allowed to buy stocks on more than 20% of portfolio value;


  • You are not allowed to make an order, which after execution will increase single stock value to more than 20% of portfolio value;


  • Just as in the real world, we have a commission fee of 0,5% for each transaction;


  • Keep an eye on your buying power, meaning the amount of spare cash you have on your account. You cannot buy 1000 shares if you can pay only for 60, right?


  • You cannot buy to cover more shares than you actually sold short previously;


  • There are two options in which the amount could be entered. You can enter the exact number of shares (if you are keen on round numbers) or enter a percentage of your total portfolio (e.g. 0.1=10%);


  • Otherwise, amount of trade is your free decision.

Step 5: Deciding upon the price and order type

Basically these 2 things are closely connected: determining the price you choose the order type and vice versa. There are 2 main order types available in Investment Game:

  • Market Order – placing such order means that you agree on the market price, and you order will be executed at the next market price on the stock exchange. This is the fastest way to make a trade without bothering about the price. Moreover, market order has the smallest bid-ask spread, which is useful for keeping tight money management.


  • Limit order – this order restricts the prices at which you want to sell/sell short or buy/buy to cover. Limit orders are frequently used when the prices are relatively volatile and a trader wants to secure himself from overpaying due to sudden price plummet. Setting the fixed max min prices, you should bear in mind current bid and ask prices for the stock. “Bid” – is the price at which you are able to sell the stock, whereas “Ask” – is the price at which you can buy the latter. Remember, the bigger the difference between the current bid-ask and your pre-set prices – the longer it’ll take for the order to be executed, because the market will wait until your and market prices will coincide. Another point to consider, you cannot set max and min prices in Investment Game simultaneously: use MIN price for selling/selling short and MAX price for buying/buying to cover!

If all these steps were carefully examined – do not hesitate to start playing Investment Game. The money you are playing with here is virtual – don’t be afraid to try different strategies! Good luck!