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Simulation Stock Market

The stock market is a place where people who want to sell or buy stock get together to do so. There are a number of different financial products that grow or shrink depending on the performance of the stock market. When people are buying products and stock prices go up products are more valuable and many of these products become more valuable. Some actually grow when the stock market value decreases. Either way many products are tied to whether the market goes up or down. 

Stock Market Simulation

Kansas Stock Market Game

Understanding Stock

Stock is ownership in a company. If fifty people got together and each took one dollar to buy a water-slide each would own one part of the slide worth the dollar they spent; this is exactly what stock is, a piece of a company! If slides were worth 50 dollars the day they bought it but 100 dollars the next day their 1-dollar would be worth two! The stock market is where people who either own these pieces, or want to, meet to buy or sell parts of companies; no differently than people buying or selling their part of the water-slide!

Understanding the Stock Market

How Employees Value Sock Options

Fractions of a Dollar

Stocks typically are represented as fractions or decimals. This is because unlike the water-slide, where there were only 50 people, stocks are split among millions of people. Modern stocks are typically represented as decimals though increases and decreases and may still be referred to in terms of fractions. Either way a stock share is 1 piece of the company; the price is just how much that slice of the pie is worth today. Just like a good pie this price goes up or down depending on how much people want to pay for a slice!

FINRA

Fractional Stock Certificates

Stock Symbols

Stocks are represented as symbols. Every company has a nickname. On the football field a player may use a nickname. In the stock market it is no different; each company has its own symbol. Also like the sports field not every player is great and not every company is either! In baseball or football there are certain ways to measure whether a player is doing well or poorly; the stock market works JUST LIKE THAT!

Stock Symbols

Stock Symbol Look up

Profit and Loss

In stocks there is something called fundamentals. This would be like whether a given player is fit, can throw, etc. Fundamentals can change just like players can. Profit and Loss is to stocks, as runs scored, or touchdowns made are to sports. It doesn’t really mean whether the player (the company) is good or bad, but it does say how they’ve been doing. Fundamental investors try to buy stocks in companies that have been doing well.

Corporate Research

Most serious investors research the companies they buy pieces (stocks) in. Some look at fundamentals like profit and loss. Others look at statistics. Instead of worrying whether the team is doing well this week they think about how average teams with the same kind of week end up. How many teams have a one-week slump and come back? How many teams that have been down for the season come back in the last few months? That is the essence of technical investing; it doesn’t rally matter whether everyone knows that company x has this great leader who’s got a lot to do. It matters what the average company has done in the same situation. Fundamental investors would do the opposite; they’d look at whether the leader of a company is really good, and think about the other value the company has without really considering the history.