MOCK TRADING SESSION Finance Club University of Illinois.

MOCK TRADING SESSION

Finance ClubUniversity 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

Go buy me a Porsche

Porsche Cayenne Turbo

… a blue one

… but don't pay more than $93,000

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


Limit OrderGo buy me a Porsche

Cayenne Turbo

Porsche Cayenne TurboFully Equipped

$90,000

… a blue one


My client is now $3,000 happy

You're my new best friend

Limit OrderGo buy me a

Porsche

Porsche Cayenne TurboFully Equipped

$100,000

… a blue one


YOU'RE FIRED

… AND I'M NOT

PAYING!

Personal Shopper

Go buy me a share of Nike

… but don't pay more than $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

Broker

Buy Nike (NKE) Limit $50

• The order comes in to broker J

Client Order

BUY LIMIT 50

C F

Buy me a share of stock, butdon't pay more than

$50

If your order is completed, you will receive a $1 commission

Broker

• J's Trading Symbol is at the bottom of the I>clicker

J My Symbol

Power On

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

Bid-AskOpenHighLowLast

Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45

ASK: I will sell atSTOCK EXCHANGEBID: I will buy at

Mock Trading Session

0JJ's Bid

Broker

• Increase the bid by clicking on C

C = BID

J


Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



0JJ

J's Bid

J

J

J

J

J

Oops. Too High

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


Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



0

J's Bid

J

JJ

J

Personal Shopper

Go sell my share of Nike

… but don't take less than $48

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

• 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


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


Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



0

MM's Ask

J

$48-$55

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


Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



0

MM's Ask

J

$48-$49

J's Bid

$49 That's good enough

for me

Broker

• J uses C to raise his bid to $49

J

C = BID


Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



MM's Ask

J$49-$49J's Bid

Highest Bid = Lowest Ask


Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



$49-$49$49$49$49$49 1

J buys from M @ $49Trade

TradeData

Broker’s Sheets

• J and M each record the transaction.

J’s Broker Sheet

• J’s client is the buyer

J

$49 $50 $ 1M

J uses the BUY side of his sheet

• 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, butdon't pay more than

$50


M’s Broker Sheet

• M’s client is the seller

M

$49 $50 $ 1J

M uses the SELL side of her sheet

• 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



Volume

$55$54$53$52$51$50$49$48$47$46$45

… TRADE…$55$54$53$52$51$50$49$48$47$46$45



(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

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$48$50$51$52$49$47$47$47$48$50

$50$48$49$51$51$52$50$50$48$47$49$50

$1

$1$1

$1$3$1

$1

MQHGMACGPRMV

J

12

$9

J

• J is a great broker

MOCK TRADING SESSION

Finance ClubUniversity of Illinois

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.

MOCK TRADING SESSION Finance Club University of Illinois.

Documents

bid j slide

j j js bid j j j j j

js bid j j j j slide

j js bid slide

j client order buy limit

share broker

high slide

symbol slide