Rules for FIN 3600 STOCK-TRAK Project

Stock-Trak, Inc. provides students with an inexpensive, and reasonably realistic market simulation. Using real market quotes, students may trade various securities in a hypothetical portfolio. Stock-Trak, Inc. maintains accounts, accepts trades, and sends out weekly summary reports. This document summarizes the rules that are specific to Dr. Mayes' FIN 3600 class for the Spring 2006 semester. Students should also consult the Stock-Trak literature for their rules.

Each student will be provided with a Stock-Trak account number, and should register as soon as possible after the first class.  Your assigned account number can be found here:

• Day Class

• Night class

 Trading will begin on February 6, 2006 and terminate on April 21, 2006. During this period, students are expected to:

• Choose a set of investments (stocks, bonds, mutual funds, options, or futures) as their beginning portfolio.  You may invest more than $100,000 -- up to $200,000 -- by borrowing (using "margin") against the other investments in your portfolio.
• Periodically buy and sell securities in their portfolio throughout the semester.  The goal is to finish the contest with more equity than any of the other students.  The frequency of trading is up to the individual student, but I will partly judge your effort by the number of trades (I’m looking for an indication of continued involvement in the project, not a specific number of trades). Note that you will be limited to 200 transactions during the semester, but you do not have to use them all.  Each buy counts as a trade, and each sell counts as a trade. Note that the majority of your grade is determined by continuous activity throughout the semester. If you do not trade regularly and all throughout the semester, your grade will be severely damaged.
• Maintain a trading diary which summarizes each trade that is made, the reasons that the trade was made, any important news event that affects their portfolio, etc. The purpose of this diary is to chronicle the reasoning and emotion behind any actions you take with the portfolio.  Diaries of this sort are incredibly useful in later analysis because they allow you to learn about your investing style, mistakes you tend to make (such as selling too quickly, or holding on too long), and the things you tend to do right.
• During the semester, you must invest in each of the following asset classes: domestic stocks, foreign stocks, bonds, mutual funds, stock options, and futures. Failure to invest in each of those (at least two of each) will result in a lower grade. If you don't understand a particular asset class (e.g. futures and options) I expect that you will do some outside study to learn about it. I am available to answer any questions that you might have.
• Keep track of the daily value of your portfolio. This means the total equity in your portfolio, not the value of each security. The beginning value is $100,000 and it will change each day as the value of the securities change. You will need these daily values when writing your final report at the end of the semester. You can most easily find this value by going to the daily ranking page on the Stock-Trak Web site after about 6:00 PM (Monday through Friday, not on weekends).
• Maintain a spreadsheet showing the date each trade was opened and closed, and the prices at which the trades were executed.  You may use your own spreadsheet, or use the one that I have created.

Stock quotes (usually delayed by 15 minutes or more) may be obtained from a number of sources. One of the best is the MoneyCentral Investor, which allows you to get quotes and news, do research, and even to track your portfolio.  In addition, there are several other sources of current business news available. My favorites are Yahoo! Finance (which also provides quotes and portfolio tracking for free), and DailyStocks. Mutual fund information is available from Morningstar. At this time, these services are free and you may access them using a Web browser from our computer labs, or home. Many other financial resources on the internet can be found at Dr. Mayes' Financial Links and the Stock-Trak, Inc site (which also provides on-line portfolio summaries, earnings estimates, news, etc.). As much as I hate to admit it, there is almost no reason to go to the library anymore for this type of information.

Portfolios are initially assigned a value of $100,000 of which 100% is invested in cash. By February 6, 2003 all portfolios are expected to have no more than 20% cash, so you must invest at least $80,000 on the first day. The balance of the portfolio must be invested in stocks, bonds, mutual funds, futures, and/or options. Note that you are free to be long or short any of these assets (other than mutual funds which can’t be shorted), and you may make full use of margin.  You are encouraged to try all of the investment alternatives at some point in the semester, and your grade will be partly determined by how many different types of securities you trade in.

Your final report is due on December 2, 2003.  The requirements for these reports will be posted on the FIN 3600 Web site before the due dates.

The top five performers, over the course of the project, will be awarded a bonus on their final grade based on their ranking.

Results will be updated weekly on the FIN 3600 Stock-Trak Results page.

This page last updated 08/22/2003