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Text File | 1989-09-26 | 14.4 KB | 338 lines

=============================================================== T H E F I C T I T I O U S S T O C K E X C H A N G E =============================================================== Welcome to the world of "The Fictitious Stock Exchange". "The Fictitious Stock Exchange" is not really a game. Instead, it is a simplistic simulation of the stock market. You will be given the opportunity here to make a fortune and become a great tycoon. You will be trading in stocks and bonds and will have the opportunity to sell short when you anticipate a bad market. In this simulation, a day will represent the equivalent of a week of real time. Each month will represent a year. It is obvious that the mathmatics of this do not quite balance, but again this is a simple simulation and these figures make the bookeeping more simple. Each player will compete against other who are playing the exact same exchange and market conditions. You will start the simulation with $2000.00 in cash and 20 shares of common stock. Your goal is to make wise investments and build your fortune. The following sections will attempt to provide you with enough information to get started. You may also want to do a little reading on your own in order to understand concepts like "selling short" and "exercising options". COMPANIES ON THE EXCHANGE ------------------------- "The Fictitious Stock Exchange" supports three company catagories and four types of stock. The following is a breakdown of the three company types: BLUE CHIP These are comapnies that are well establi- shed. They have a good track record and will normally have very stable stock prices. You can think of stock in these companies as a savings account. These companies also pay a yearly dividend on both their common and prefered stock shares. A 2% dividend against the current market value of the stock will be payed the first day of each year (each month in the simulation). A 4% dividend will be paid against the current market value for all prefered shares. MUTUAL FUND These companies deal primarily in bonds. In this simulation, all bonds are considered guaranteed bonds. Guaranteed bonds have a guaranteed pay back value. On the first day of each year, each company having bonds will buy them back at their guaranteed rate. SPECULATIVE These are the new companies on the exchange. The price of their stock is usually very volatile and subject to radical changes. These companies are where you can really make or break your fortune. There are 12 companies in "The Fictitious Stock Exchange". Each is a little different than the other in both their type and in the stock types they offer. The following is a list of all 12 companies: IGM - International Bubblegum Machines LST - Lunar Shuttle Technologies WWI - World Wide Insurance Corp. ALG - Alaska Geothermal Energy Systems SBG - Silicon Valley Business Group FFD - The Farkle Fund of America CCC - Clone Computer Corp. MMC - Megabyte Memory Corp. SSI - Simple Software Inc. BBM - Bulletin Board Magazine, Inc. SXC - Software Exchange Corp. WHS - The WarHouse Sporting Goods STOCK TYPES ----------- Each company on the exchange offers one or more types of stock. The following list shows the four types of stock available: OPTIONS Options are not really shares of stock in their own right. They are actually the right to buy common shares at a fixed price. They may however be traded on the exchange just as if they were actual stock. In some readings you may find these refered to as warrants. COMMON Common shares are the standard type of stock. They represent some portions of the company that you actually own. PREFERED Prefered shares are offered by many companies. They differ from common shares in that their price is usually more stable and they will always be worth at least as much as the common shares and most of the time a little more. BONDS Bonds are not really shares of stock either. They are a type of loan that you make to a company and it agrees to pay it back at some future date with a guaranteed return value. If bought at a low enough price, they are an excellent investment. GETTING COMANY INFORMATION -------------------------- In order to make intelligent decisions about the companies and their stocks, it is often important to know a little about the company. The PROFILE command in "The Fictitious Stock Exchange" is provided expresly for that purpose. The command will provide all the information you will need to know for each company. The following is a sample of a company profile: ----------------------------------------------------------------- Company name : Clone Computer Corp. +----- OPTIONS ----- Exchange sysbol: CCC 12| Stock type : Speculative 11| Total Current Price 10| Options : 10000 10000 $ 6.00 9| Common : 100000 99968 $ 8.00 8| *-* *-*-+ Prefered : 1000 1000 $ 33.00 7| | | | | Bonds : not traded 6| | +-*-*-*-+ * 5|*-*-+ Options conversion price: 40.00 4| Bond guaranteed price : not traded 9 8 7 6 5 4 3 2 1 0 ----------------------------------------------------------------- Profile of CCC: Although this Silicon Valley company has only been on the exchange for 3 years and is still considered a risk investment, many brokerage houses are supporting the purchase of their stocks & options. The company is predicting a steady growth for at least the next 10 years. The company offers stock options, common, and prefered shares of stock. This stock is most likely a good gamble. ----------------------------------------------------------------- Along with this information, you will see graph showing the stocks performance over the last 10 weeks (days in real time). GETTING A MARKET REPORT ----------------------- It will always be necessary to get current stock quotes in order to plan your stock transactions. The main screen will show you both the current market prices as well as your holdings in that stock. The following represents a sample display: Company Options Common Prefered Bonds ---------------------------------------------------------------- IGM --- 35/$81.00 10/$98.00 --- LST --- 0/$55.00 0/$75.00 --- WWI --- 0/$36.00 0/$43.00 --- ALG --- 0/$ 3.00 --- 0/$853.00 SBG --- --- --- 20/$143.00 FFD --- --- --- 0/$925.00 CCC 10/$ 6.00 0/$ 8.00 0/$33.00 --- MMC 0/$ 9.00 40/$52.00 --- --- SSI 50/$ 7.00 0/$15.00 --- --- BBM 0/$16.00 0/$ 1.00 --- --- SXC 0/$19.00 100/$ 4.00 --- --- WHS --- 0/$ 2.00 --- --- ---------------------------------------------------------------- Cash: $3500.00 Your cash amount will normally be displayed at the bottom left of the screen except when it is replaced by a prompt. GETTING A BROKERS REPORT ------------------------ In the real world, many investors rely on the information provided by their brokers. They use this information in order to attempt to make wise investments. In "The Fictitious Stock Exchange", players can go to the broker and pay to have the broker research a company. More times than not, the broker will not be able to find anything out. Sometimes he will even find information that is not true. Use the BROKER command to receive a report similar to this sample: Brokers Report on CCC: ---------------------- Options are expected to be moderately sold Common shares are expected to be heavily sold Prefered shares are expected to be lightly bought BUYING AND SELLING STOCK ------------------------ Because the broker is a busy fellow, he will only see you once a week (a day in the simulation). You will use the TRADE STOCKS menu whenever you want to buy and sell stocks. Due to FTC rules on monopolies, no player may hold over 50% of a companies stock. SELLING SHORT ------------- A method exists in the stock market to make money on stocks that are dropping in price. You can "sell short" stocks that you feel will drop in price. Arrangements are made with a broker to sell stocks that you do not own at their current market price and to buy them back later when the price is cheaper. In "The Fictitious Stock Exchange" this is done by putting up a 50% margin against the current value of the stock. When you buy back the stock, your deposit is refunded and you will pay or receive the difference in price depending on whether the stock has gone up or down. Due to the amount of bookeeping involved, you will only be able to have one outstanding "short sell" per company. When "selling short" you must also be aware that if the stock price raises 20% or more over your short selling price, the broker may execute a margin call to force you to close out the transaction GUARANTEED BONDS ---------------- All bonds in "The Fictitious Stock Exchange" are considered guaranteed bonds. That is the company issuing the bonds guarantees the bonds will be worth a predefined value at their maturity. All bonds mature on the first of every year (first of each month in real time). THE USE OF OPTIONS ------------------ Options may be used whenever purchasing common shares of stock. When options are exercised, each share is paid for with the cash value of the conversion price and one option. Options used this way are returned to the company and will become available for sale again. It is obvious that you don't want to exercise options if the current common share price is less than the conversion price. STOCK SPLITS ------------ All the companies in "The Fictitious Stock Exchange" that deal in common stock have a price at which they will split their stock. This is done by companies in order to keep their stock selling at a rate that is not to high for people to buy. When a stock splits, all share (in all of the stock types) will be doubled. The price of the shares will be cut in half. STOCK CRASHES ------------- In the event that a stock price becomes zero or negative, that stock will be considered crashed. All holdings in that companies stock are wiped out. If the common stock of a company crashes, the company will be assumed to have gone bankrupt and all holdings in that company will be lost. Due to the minimal number of companies in "The Fictitious Stock Exchange", companies that go bankrupt will be immediately replaced by a new company of the same name. GOING BROKE ----------- If at anytime you begin a session with less than $100.00 in assets, you will be considered bankrupt. You will then be started over with a new stake in life. PAGING OPERATOR --------------- If you get stuck, you way wish to page the SysOp to get some help. Use the PAGE command to accomplish this, but please only page if you really need the help. "The Fictitious Stock Exchange" a product of Mycroft Systems (408)927-0105