MOCK TRADING SESSION

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

… but don't 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 FBuy 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

JJJJJ

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 BidJJJ

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 FSell 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-$49J'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 FBuy 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 FSell 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.

Documents

MOCK TRADING SESSION