1. National Council of Economic Education
Carolyn Shirk
Vice President
849 Tame Deer Drive
Winfield, PA 17889
Cell:

2. Sponsored By:

3. Welcome & Introductions
Who we are….
ECONOMICSPennsylvania at
NCEE at
SMG Advisors

4. FNB Center for Economic Education

5. Stock Market Game Program

6. Teacher 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.

7. Teacher 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.

8. What 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

9. What Teachers like about SMG
teaches economic concepts
sharpens skills in mathematics, especially in fractions and basic computations
incorporates easily into most classes
Is FUN!

10. What is the Stock Market Game Program
(SMGP) ?

11. History of the Game
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

12. EconomicsPennsylvania is the licensed distributor of the Stock Market Game Program in PA Administrative offices and support of SMGP of PA provided by Temple University Fox School of Business and Management

13. Stock Market Game Interdisciplinary Applications

14. SMG Interdisciplinary Benefits
Language Arts: Research, Vocabulary, Presentations, Reading Comprehension
Social Studies: Current Events, Government Policy, Economic Concepts, Cultural Issues, History of our Economy

15. SMG Interdisciplinary Benefits
Business Education: Consumer Spending, Decision Making, Record Keeping, Financial Planning
Mathematics: Fractions, Decimals, Percentages, Ratios, Basic Computation
Technology: Spreadsheets, On-line Research, Presentations, Word Processing

16. Stock Market
Game Basics

17. SMG Basics Real-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

18. SMG Basics
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

19. SMG Basics
Teams should have two to five players
Only common stocks listed on the American, New York, and NASDAQ Stock Exchanges may be traded

20. 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.

21. SMG Basics 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

22. SMG 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.

23. How Does the Competition Work?

24. Teams compete within a geographic region and on six levels

25. Grades 4-6 Grades 7-8 Grades 9-12 Post-Secondary Youth Groups Adult
SMG Levels
Grades 4-6
Grades 7-8
Grades 9-12
Post-Secondary
Youth Groups
Adult

27. Rules of the
Stock Market Game

28. Advisors need a working Email address and Internet access to play
SMG Rules
Advisors need a working address and Internet access to play
Transactions are made at the SMG WorldWide site at: or login.html
SMG of PA operates on ‘real time’ trading
Trades are processed within 10 – 20 minutes

29. 2% interest is earned on cash balance
SMG 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

30. Trades entered after 4:00 p. m. will be processed at 9:35 a. m
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.

31. General
In formation

32. Buying: Must be for a minimum of 100 shares
General Information
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

33. Selling: Must already own the stock
General Information
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

34. General Information
Please Note:
For real time trading price limits are generally not needed except for trades entered after the market close.

35. General Information
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

36. Short Covering: Must have already short sold the stock
General Information
Short Covering:
Must have already short sold the stock
May set a maximum price limit
All other rules for selling apply

37. Example: Short Selling and Covering
General Information
Example: Short Selling and Covering
I feel that IBM stock is going to go down and want to short sell the stock.
I am borrowing the stock from the broker (2% brokerage fee) and selling it. Now I’ve got cash.

38. Example: Short Selling and Covering
General Information
Example: Short Selling and Covering
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.
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.

39. A Long Position is a stock you own.
General Information
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

40. A Short Position is a stock you borrowed from the broker and sold
General Information
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

41. = Equity Equity: + Cash Balance Total Value of Long Position
General Information
Equity:
Total Value of Long Position
+ Cash Balance
= Equity

42. Initial Margin Requirement = 50%
General Information
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%

43. Borrowing 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

44. Good Ideas

45. 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

46. SMG Assessment Ideas:
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

47. 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

48. Suggested Team Roles Entire Team Research all holdings
Identify possible stocks
Collect company information
Give rationale for making a trade
Captain
Conduct team meetings
Determine consensus
Enter transactions on game site

49. Team Roles
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....

50. $
SMG Costs

51. Team Fees: Year Long Game:
SMG Costs
Team Fees: 10 Week Games:
Grades $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

52. New advisors receive: Learning From the Market
Your Guide to Understanding Investing
Market Mechanics CD Rom
Classroom materials
A free adult team upon request