Trading and Information

SourcesSteve CondonCraig Ganger

The Stock Market Class Winter 2003

Trading

The Stock Market Class

The Trading Procedure The Analyst (student) has an idea to buy/sell The Analyst convinces the Portfolio Manager (class)

to take action The PM tells the internal trader (GA) to buy/sell The internal trader calls a broker with the order The broker calls the commission broker on the

exchange The commission broker goes to the specialist who

completes the deal Confirmation of the order takes place in reverse

Behind the Scenes Buy/sell order from client Broker executes trade Broker informs Deposit Trust Corporation

(DTC) about trade DTC informs State Street Bank (custodian)

to transfer shares/cash to the DTC Shares/cash are transferred to DTC within

T+3 business days DTC transfers shares/cash

What Broker to Use? Cost

Quality of Service & Execution

Quality of Research

Availability of Resources Soft dollars

Relationships are key

Trading Costs

Actual Cost % Cost

Commission 6 cents/sh 12 bps

Market Impact 9 cents/sh 20 bps

Delay Costs 24 cents/sh 53 bps

Missed Trades 8 cents/sh 16 bps

Total 47 cents/sh 1.01%

* Plexus estimates of one-way trade involving a large-cap stock

Who Do We Trade Through?

Our Broker List

Prudential Securities (5 cents/share)

Salomon Smith Barney (6 cents/share)

A G Edwards and Associates (6 cents/share)

Voyager Institutional Sales (6 cents/share)

Types of Orders

Market

Order is executed immediately

Execution of order is time-sensitive

Types of Orders Limit

Limit-buy order Stop-buy order

Limit-sell orderStop-loss orderSell

Buy

Price below the limit

Price above the limit

Condition

Acti

on

Information Sources

The Stock Market Class

Bureau of Economic Analysis www.bea.doc.gov

Bureau of Labor Statistics http://stats.bls.gov

Federal Reserve Board www.federalreserve.gov

Research – Economic Data

Research – General News WSJ [www.wsj.com]

News, need online account for full access

CNN [money.cnn.com] News, stock data, data for many markets

Bloomberg [www.bloomberg.com] News, number of markets covered

CBS [cbs.marketwatch.com] News, basic data

Financial Times [news.ft.com] Local and global news stories

Research – Company Data Yahoo [finance.yahoo.com]

Historical quotes, basic stock data, news, charts

Hoovers [www.hoovers.com] Company capsule, competitors, news, executives

MSN [moneycentral.msn.com] Real-time quotes, news, up/down-grades

BigCharts [www.bigcharts.com] Pretty Charts

Quicken [www.quicken.com] Competitor Comparisons, Portfolio Tracking/Analysis

Research – Annual Reports Company Websites

For pretty annual reports available to investors

Edgar Online [www.edgar-online.com] Go to [www.freeedgar.com] for free registration (10 docs/month) Access to 10Ks and other company filings [http://edgarscan.pwcglobal.com]

Improved site w/ excel-download capability

Report Gallery [www.reportgallery.com] Includes domestic and international reports

Username PasswordAG Edwardswww.agedwards.com SIM SIMP1X

Bear Stearns www.bearstearns.com SIMS SIM3545

Merrill Lynch www.mlx.ml.com kspellman SIMP1X

Prudential www.cm1.prusec.com SIM SIM

Salomon Smith Barney www.salomonsmithbarney.com SIMOSU SIMOSU

UBS Warburg www.ubswarburg.com simp simpxxxx

Research – Analyst Reports

Other Useful Investment Sites Standard and Poors [www.spglobal.com]

Benchmark information CFA exam stuff [www.aimr.org] Morningstar [www.morningstar.com]

Lots of mutual fund & stock analysis Fisher library access to Investext Plus

[http://fisher.osu.edu/library/databases/online.htm] Access to sell-side research reports

The Street [www.thestreet.com] Lots of commentary, analyst info

Stock Tips [www.marthastewart.com]

The Stock Market Class Portfolio Yahoo! Finance

http://finance.yahoo.com Sign in

Yahoo! ID Password

Click on portfolio name

Updating done by GA

Fisher Resources – Bloomberg Good for detailed news and information on

many different types of securities Colorful keyboard

Use top row of keys to go to primary menus Ex: equities, money mkt, govt, munis, commodities

Uses menu system with either mouse or number + enter

Lots of real-time data News, quotes, earnings estimates, filings

Fisher Resources – Datastream Lots of historical data on almost anything Especially useful with international

companies Download many different data types for

many different securities Ex: monthly price data for 30,000 equities

Use macro w/ DS code to download data into comma-separated file

Fisher Resources – First Call Real-time news provider

Gives analysts reports, research broadcasts, etc.

Use top row of buttons for quick access Ex: F1 – F10

Fisher Resources – Bridge Good for real-time news and data

Lots of real-time data

Colorful screen interface

Fisher Resources – StockVal Good for historical data & ratios

Add-in w/ excel makes analysis easier

Uses a lot of tabs, buttons, etc. so wonder around with mouse

Can create portfolios Multiple equity analysis at same time