13 Asx Ssmg Quickstart Lesson1 St

7/27/2019 13 Asx Ssmg Quickstart Lesson1 St

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THE REAL DEAL 2013 ASX Schools Sharemarket Game

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THINKTRADEWIN

QUICKSTART LESSON 1GAME INTRODUCTION



QUICKSTART LESSON 1: STUDENT WORKSHEET

ASX Schools Sharemarket Game

S.1

ASX Today

Today there are over 2,300 Australian companies listed on ASX. These companies are divided into sectors. These are similarindustries that have been grouped together; or example banks, insurance and real-estate are grouped into the Finance

sector. You will learn more about sectors later.A company can raise money to grow its business by ‘going public’. This means issuing shares to investors and then beinglisted on the stock exchange. By paying or the shares, each investor buys part ownership o the company’s business and becomes a shareholder o the company.

Ater the shares have been issued they can then be sold to other investors on the sharemarket. In this way, a shareholdercan potentially make a proft by selling their shares or more than they paid or them.

You buy or sell shares by using a stockbroker. Stockbrokers buy and sell shares in the market on behal o investors. Abrokerage ee is charged by the stockbroking frm or buying and selling the shares on their client’s behal.

Share trading takes place during ASX trading hours – 10am to 4pm weekdays

The Sharemarket Game!In this lesson you will learn about the sharemarket and how you can play the Sharemarket Game by investing $50,000.

What is the sharemarket all about?A share is a unit o ownership in a company.

The sharemarket is where the buying and selling o company shares takes place, in this case through ASX – theAustralian Securities Exchange.

The sharemarket has similarities to an auction. Where buyers compete by raising their bids and sellers compete bylowering their oers.

An example o this is eBay. When a person is selling a product on eBay, they want to sell or the highest price pos-sible. The person buying wants to pay the lowest possible price to save some money. They hope that no one comesin to bid against them because this will push the price up.

A ruit market is another example. All the sellers compete by oering lower prices or their produce while buyersmust be prepared to pay more to get what they want.

In each example when both the buyer and the seller agree on a price, the trade occurs.

A bid is the price a buyer is willing to pay or a particular share.

An oer is the price a seller will accept to sell the share.

TO FIND OUT MORE ABOUT THE ASX:www.asx.com.au

Another investorbuys shares

Shares rise/alland investor sellsor proft/loss

Investor buysshares & becomesshareholder

Sells sharesto investors

Companygoes public





S.2

The Game!

1) How to login:

To login to the Game go to: www.asx.com.auClick on the Student login button (see below).

Log in using your assigned Player ID and password (your teacher will give you this)

This is your chance to buy and sell shares in the sharemarket – hypothetically o course. In the Sharemarket Gameyou get $50,000 to spend on buying or selling shares.

Today you will learn more about how the Game works so that you can jump in and test it out yoursel. The Gameruns or 10 weeks and there are some pretty good prizes…like cash!

The Game ollows the live sharemarket. This means that i BHP shares are worth $37.19 in the live market, this iswhat you may buy or sell them or in the Game.

I BHP shares move up or down in price, this is also what will happen to the value o your shares.

This is as close as you can get to real lie trading.

So let’s take a look at the Game…frst o all you need to login.

THEREALDEAL





S.3

2) Now go to the Getting started page and fnd out

a) List 5 companies that are in the Game, include their ASX code.

b) What is a dividend? (See Understanding dividends)

c) Where can you fnd company announcements? Why would it be helpul to keep up to date with announcements?

d) What is a sector?

e) List the 10 Sectors we use in the Game (See Company sector list).

‘ A G a m e T i p ’

E a c h c o m p a n

y h a s a

3 l e t t e r c o d e,

w h e n y o u

g o t o t h e c o m

p a n y l i s t

y o u w i l l s e e t

h e A S X c o d e

o n t h e r i g h t h

a n d s i d e.

THEREALDEAL





S.4

3) Watch: ‘Finding your way around the Game’ (See ASX Game tutorials at top o

Getting started page)Where can you fnd:

a) Hot & Cold stocks

b) Cash you have available

c) Your trading statement

d) Dividends you have received

e) Upcoming dividends

) Company inormation

g) % o players in proft

h) Your school ranking

i) Your state ranking

j) Links to fnancial sites





S.5

4) Watch: ‘How to place a trade’

a) Where can you fnd the current price o a share?

b) What do you ALWAYS need to check every time you place an order?

c) What is a market order?

d) What is the purpose o the preview order window?

e) Where does your order go once it has been submitted?

) What is a limit order?

g) Can you cancel or change your order?

‘ A G a m e T i p ’

O n y o u r P o r t o l i

o P a g e, y o u

m i g h t n o t i c e t h a t y

o u r o r d e r h a s

b e e n p r o c e s s e d i n a n u m b e r o

t r a n s a c t i o

n s. T h i s i s b e c

a u s e i t i s

m a t c h i n g o r d e r s i n t h e l i v e m a r k e t

a n d i t m a y t a k e a e w t r a n s a c t i o n s

o r t h e w h o l e o r d e r

t o b e f l l e d.





S.6

Helpful things to knowShares are bought and sold using a stockbroker. A stockbroker acts as an agent to buy or sell shares on a person’s behal.This can be done either online or over the phone. The Game simulates buying and selling online.

What is brokerage?

There is no ee when an order is placed but when that order is flled and a trade occurs the stockbroker will charge aee – this is their ee or buying and selling the shares. The brokerage charge can vary depending on the type o brokera person is using.

To fnd out more about brokerage costs in the Game go to the Game Help page.https://www9.asx.com.au/Smg/SchoolHelp

You need to take brokerage into consideration when buying and selling as this is an additional cost that you will payevery time an order is completed to buy or sell shares. Be careul that you don’t eat into your profts by buying and sellingtoo much because you will end up paying a lot o brokerage.

What is an order?

An order in the sharemarket is the request that you put in to either buy or sell a certain number o shares in a particular company.

Let’s take a look at an order in the Game.

Here you can see we have an order to buy 250 CBA shares using a market order.

You can enter either a market order or a limit order as highlighted in the video ‘How to place a trade’.Let’s take a look at the dierence.

A market order: Let’s say you have just turned 18 and you have saved the money to buy a car. Now you are out with aamily member looking at cars and you see one you really like. You say to the car dealer – ‘I want to buy that car rightnow so I will paythe price that it is being oered or now.’ A market order is a little like this.

In the sharemarket, a market order is where you choose to take the next available price in the market once your orderhas been placed. This means your order will be matched immediately (assuming the quantity you want is available). Theadvantage is thatyou are more likely to get the number o shares you want; however, you can’t be sure o what you will have to pay.





S.7

Helpful things to know (CONTINUED)A Limit order: This time whilst shopping or your car, you might decide that you want to set a limit on what you areprepared to pay, let’s say, $4000 or less – a limit order is similar to this.

In the sharemarket, by choosing a limit order you are setting a limit by nominating the price you want to buy or sell theshares. When you set a limit order to buy, you are saying I am happy to buy at this price or below (just like your car) – but

not any higher.I you wanted to sell your car, you would want to get the best price or it. It’s the same with selling your shares. Whenyou use a limit order, you are saying I am happy to sell or this price (the one you nominate) or above – but not any lower.

A limit order has the advantage that you will never buy at a higher price than you are prepared to, or sell at a price lowerthan you want. The risk is however, that you may miss out i your price is too high or people wanting to buy or too lowor those wanting to sell.

Can you put all your money into buying one company?

You can do this in real lie i you wish; however, there is a belie that this is not the best thing to do as it is very high risk.

In the Game there is a diversifcation rule that stops you rom being able to put all your money into one company. You

can only invest 25% (o your total portolio value) in any one given company. I you try to enter an order or too manyshares in one company the system will not allow the order and wil l tell you that you need to buy ewer shares in thatcompany.

To diversiy simply means to invest in dierent companies and/or dierent industry sectors that don’t tend to move inthe same direction at the same time.

This will help reduce your risk o losing money. Let’s say you invested all o your $50,000 in one company and the sharesin this company dropped by 30%. This would mean that your $50,000 investment is now worth only $35,000 – that’sa loss o $15,000. Whereas, i you invested in 4 companies (in dierent sectors with approximately $12,500 invested ineach) and the other 3 companies are doing OK, that 30% loss is now only $3,750 – quite a dierence.

Remember, no one knows or certain how dierent companies or industries are going to perorm in the uture. So invest-

ing in a range o sectors helps reduce risk. Be careul o over diversiying (having just a ew shares in a lot o dierentcompanies) – because you will end up paying a lot o brokerage and i some companies do really well you want to ownenough o them to make some good profts.

Can I trade any time through the day or night?

You can put your order in at any time; however, as the market is onlyopen between the hours o 10am and 4pm Sydney time, your orderswill only be processed over this time.

T o s u m u p :

D o n ’ t p u t a l l y

o u r

e g g s i n t o o n e

b a s k e t, b u t d o n ’ t

o v e r d o i t o n t h e b a s k e t s.





S.8

Investigate:1) Find out which listed companies are associated with the ollowing products or services:

(You will need to search other sites or this inormation.)

a) Master Che

b) Uncle Toby’s

c) Powerade

d) Jetstar

e) Hearing aids / implants

) Sydney Morning Herald

2) a) What is brokerage and how much brokerage is charged in the Game?

b) What is diversifcation?

c) With a portolio value o $50,000 what is the maximum amount that you can put into any one company?

d) Can you trade at any time?

e) What is the dierence between a market order and a limit order?





S.9

Investigate: (CONTINUED)

3) There are dierent kinds o stockbrokers, see i you can fnd out what they are called and why they are dierent?

4) Ask your parents or your grandparents i they have any investments or made any investments in the past?Do they think these have been a good investment?





Notes:

Documents

13 Asx Ssmg Quickstart Lesson1 St