Stock Market Trading Game I can… Explain what the stock market is Examine how the stock market works Evaluate the risks involved in trading on the stock market Starter: If you could have invested in either the company that runs British Airways or the company that makes Marmite for the month of March 2013, which would you have invested in? What about for 1 year? For 3 years?

Big Idea “Progress involves exposing ourselves to and considering the impact of danger, harm, uncertainty or opportunity.”

What are stocks and shares? If a company wants to raise money, it sells ownership of the company. Having ownership is called owning stock in a company. This ownership is sold in pieces called shares. E.g. My company is represented by 100 shares and each share is worth £1. This means my company is worth £100 (100 x £1). If you bought 10 shares for £1 each you would own a tenth of my company (10  100 = 0.1). If you sold could sell each share to another person for £2 each, my company will now be valued at £200 and you will have made a profit of £10. This buying and selling of shares is called the Stock Market.

£1

£2

50p

Share price correct on 7 th March 2013 British Airways Marmite (Unilever)

British Airways (1 year) British Airways (3 years) Marmite (1 year) Marmite (3 years)

You will be a stock market trader, which means you will buy and sell shares for other people to make them money. You will use a pre-made Excel spreadsheet to do most of your calculations for you (spreadsheet from Fronter). There is only one thing you decide on – how many shares to buy from each industry type, per day for 6 days. You have £10,000 to start with (starting capital). You have to send a representative to the forum to note down the price of each share at the start of Day 1 and then again at the end of each day. You must input data into any box highlighted yellow.

Roles: Lead Trader – overall responsibility, chairs discussions and leads the trading process ICT Specialist – handles the Excel spreadsheet Price Runner – finds out the shares prices (does NOT run!) Analysts – advise on the number of shares to buy and lead any calculations to be performed Quality assurer – Questions all calculations and choices on shares to buy

Write your trading name, e.g. CY1 Market Consultants Enter your starting capital for each week (this is automated after day 2) Enter your closing capital for each week (this is automated after day 1) Enter the number of shares you will purchase Enter the purchase price for the shares (price at the start of each day – you only fill in for Day 1) Check you do not exceed your starting capital (box should be green) Enter the selling price for the shares (price at the end of each day)

Percentage Gain or Loss (% Gain/Loss) To calculate the overall Percentage Gain/Loss, use this equation: (Day 6 Closing Capital – Day 1 Opening Capital) x 100 Day 1 Opening Capital Your answer will be positive if there is a gain and will be negative if there is a loss. Record the value you calculate in the Google Sheet which is linked in the Learning Platform. File name is “Summary at Close of Trading”.

Each student should now complete their own Worksheet.

What have you learned? What are shares? What is the stock market? Who are traders? What affects % gain/loss? What is capital? How realistic is this game in representing the real stock market? What are pros and cons of trading on the stock market? What does owning stock mean?

Learning SetGain/Loss% Gain/Loss CY VE LY EQ OR Summary at close of trading Who were the most successful traders? What made them successful?

Stock Market Trading Game I can… Explain what the stock market is Examine how the stock market works Evaluate the risks involved in trading on the stock market