National Council of Economic Education Carolyn Shirk Vice President 849 Tame Deer Drive
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Transcript of National Council of Economic Education Carolyn Shirk Vice President 849 Tame Deer Drive
National Council of Economic Education
Carolyn ShirkVice President
849 Tame Deer DriveWinfield, PA 17889
Cell: 570-975-5149570-374-9467
Sponsored By: Sponsored By:
Who we are….
ECONOMICSPennsylvania at www.economicspa.org
NCEE at www.ncee.net
SMG Advisors
Welcome & Welcome & IntroductionsIntroductionsWelcome & Welcome & IntroductionsIntroductions
FNB Center for
Economic Education
Stock MarketStock MarketGameGameProgramProgram
Teacher Survey FindingsTeacher Survey Findings
90% said that students were encouraged to learn more about the curriculum being taught with the SMG Program.
94% agree that the SMG Program helps them teach basic academic skills such as math, language arts, and social studies, in exciting ways.
Teacher Survey FindingsTeacher Survey Findings
96% agree that the SMG Program increases students’ ability to apply basic skills to life decisions.
98% found that their students’ understanding of the importance of saving and investing improved using the SMG Program.
What Teachers like about SMGWhat Teachers like about SMG
generates enthusiasm in hard-to-motivate students
helps meet educational standards across many required disciplines
combines the spirit of competition with learning
promotes cooperation and group autonomy among students
creates interest in current events
teaches economic concepts sharpens skills in mathematics,
especially in fractions and basic computations
incorporates easily into most classes Is FUN!
What Teachers like about SMGWhat Teachers like about SMG
What is the What is the Stock Market Stock Market Game Game ProgramProgram
(SMGP) ?(SMGP) ?
Started in the late 1970’s by a University of Buffalo professor
Over 500,000 students compete nationally each year and over 40,000 students in Pennsylvania compete each year
Nationally sponsored by the Foundation for Investor Education
History of the GameHistory of the Game
EconomicsPennsylvaniaEconomicsPennsylvania is the is the licensed distributor of the Stock licensed distributor of the Stock Market Game Program in PAMarket Game Program in PA
Administrative offices and support of SMGP of PA provided by Temple University Fox School of Business and Management
Stock Market Stock Market Game Game Interdisciplinary Interdisciplinary ApplicationsApplications
SMG Interdisciplinary SMG Interdisciplinary BenefitsBenefits
Language Arts: Research, Vocabulary, Presentations, Reading Comprehension
Social Studies: Current Events, Government Policy, Economic Concepts, Cultural Issues, History of our Economy
Business Education: Consumer Spending, Decision Making, Record Keeping, Financial PlanningMathematics: Fractions, Decimals, Percentages, Ratios, Basic Computation
SMG Interdisciplinary SMG Interdisciplinary BenefitsBenefits
Technology: Spreadsheets, On-line Research, Presentations, Word Processing
Stock Stock MarketMarket
Game Game BasicsBasics
SMG BasicsSMG BasicsReal-time stock market simulation
Played on the internet from any computer
Invest in most stocks and mutual funds traded in the three major US exchanges
The game runs for ten weeks in the Fall, Spring, and Late Spring, along with a Yearlong Game
Each team begins with a hypothetical $100,000
Teams may buy, sell, short sell, or short cover their stocks
SMG BasicsSMG Basics
Teams should have two to five players
Only common stocks listed on the American, New York, and NASDAQ Stock Exchanges may be traded
SMG BasicsSMG Basics
Mutual funds may be traded
Closed-ended funds may be traded just like the stocks traded on the NYSE, NASDAQ and American Stock Exchanges.
Open-ended mutual funds can also be traded but cannot be short sold or short covered.
A 2% brokers fee is charged for each transaction
Stocks valued at less than $5.00 per share may not be bought
Teams may borrow up to $100,000 to purchase stocks on margin -- interest is charged
SMG BasicsSMG Basics
The team with the highest portfolio equity at the end of the game wins
Portfolios are not liquidated at the end of the game
Portfolio equity in the tenth week is used for final rankings
Game week runs Monday through Friday.
SMG BasicsSMG Basics
How Does How Does the the Competition Competition Work?Work?
Teams compete within a geographic region and on six levels
Grades 4-6 Grades 7-8 Grades 9-12 Post-Secondary Youth Groups Adult
SMG LevelsSMG Levels
Rules of the Rules of the Stock Market Stock Market GameGame
Advisors need a working Email address and Internet access to play
Transactions are made at the SMG WorldWide site at: www.smgww.org or http://stockmarketgame.org/ login.html
SMG of PA operates on ‘real time’ trading
Trades are processed within 10 – 20 minutes
SMG RulesSMG Rules
Stock and cash dividends are automatically computed into team portfolios
2% interest is earned on cash balance
Portfolios are updated and available on a daily basis
Rankings are updated every weekend
Stock ticker symbols are used and can be looked up on the game pages
SMG RulesSMG Rules
Trades entered after 4:00 p.m. will be processed at 9:35 a.m. the following day.
ROGUE STOCK RULE – If a stock has not been traded for seven days it will not be accepted and will not be permitted to be traded even though it is on the three major stock exchanges.
General General In formationIn formation
Buying:Buying:
Must be for a minimum of 100 shares
Must have a closing price of at least $5.00 per share
May set a maximum purchase price limit
General InformationGeneral Information
Selling:Selling: Must already own the stock
Must be for a minimum of 100 shares (unless selling the only remaining shares)
ex: If you bought 120 shares, then sold 100, you may then sell the remaining 20.
May set a minimum selling price limit
General InformationGeneral Information
Please Note:
For real time trading price limits are generally not needed except for trades entered after the market close.
General InformationGeneral Information
Short Selling:Short Selling: Short selling starts with
borrowing a stock from your broker
You sell the borrowed stock hoping to buy it back at a lower price and return (short cover) it to your broker for a profit
All rules for buying still apply
General InformationGeneral Information
Short Covering:Short Covering: Must have already short sold
the stock
May set a maximum price limit
All other rules for selling apply
General InformationGeneral Information
Example: Short Selling and Example: Short Selling and CoveringCoveringExample: Short Selling and Example: Short Selling and CoveringCovering
I am borrowing the stock from the broker (2% brokerage fee) and selling it. Now I’ve got cash.
I feel that IBM stock is going to go down and want to short sell the stock.
General InformationGeneral Information
When stock price is at its lowest, I short cover by buying the stock back in the stock exchange at the low price and returning it to the broker (2% brokerage fee). I keep what I didn’t spend.
I get the difference between the high price and the low price minus the brokerage fees.
Example: Short Selling and Example: Short Selling and CoveringCoveringExample: Short Selling and Example: Short Selling and CoveringCovering
General InformationGeneral Information
Note: it’s important to remember that you borrow the stock from a broker and return the stock. You do not give the broker any money.
Long Positions:Long Positions:
A Long Position is a stock you own.
Ex: If a team owns 100 shares of McDonalds, their long position is 100 shares.
= Value of Long Position
# of shares
X current price per share
General InformationGeneral Information
Short Positions:Short Positions:
A Short Position is a stock you borrowed from the broker and sold
# of shares
X current price per share
= Value of Short Position
General InformationGeneral Information
Equity:Equity:
Total Value of Long Position
+ Cash Balance
= Equity
General InformationGeneral Information
Buying on Margin:Buying on Margin:
You may borrow funds using the stock in your portfolio as collateral for the loan
Interest charged at 7%
Initial Margin Requirement = 50%
General InformationGeneral Information
Borrowing on MarginBorrowing on Margin
30% of value of long and short position is required as collateral (margin requirement)
Purpose to limit the amount borrowed to purchase stocks (risky) and to protect the broker
SMG Assessment Ideas:SMG Assessment Ideas:
ARTICLES from web, newspapers or magazines on corporations
NOTES that state why
GLOSSARY of terms with definitions
LETTER to corporations requesting information
HEADLINES with a brief paragraph explaining the impact the story will have on the market
JOURNAL of TV coverage of market activities
BIBLIOGRAPHY of readings GRAPH showing changes in
the value of a stock
SMG Assessment Ideas:SMG Assessment Ideas:
SMG Assessment Ideas:SMG Assessment Ideas:
BASIC DATA about a corporation 52-week high and low P-E ratio Location Amount of debt Average number of shares trading daily Company plans for the future S&P ranking, etc
WORKSHEETS that track the initial purchase, price, broker’s fee, selling price, and profit or loss
Suggested Team RolesSuggested Team RolesEntire TeamResearch all holdingsIdentify possible stocksCollect company informationGive rationale for making a tradeCaptainConduct team meetingsDetermine consensusEnter transactions on game site
Economic Research Coordinator Researches fundamental economic
data: current events, overall economy...
News about industries Provide reports to team
Record Keeper, Transaction Reporter, Charter, and more....
Team RolesTeam Roles
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Team Fees: 10 Week Games:Grades 4-12 $15
College $15
Youth Groups $18
Adult or Yearlong $25
Team Fees: Year Long Game:All groups $25
New Advisor Fee: $25 First time registration only
SMG CostsSMG Costs
New advisors receive:New advisors receive:
Learning From the Market Your Guide to Understanding
Investing Market Mechanics CD Rom Classroom materials A free adult team upon
request