Stock market simulator

A stock market simulator is a program or application that attempts to reproduce or duplicate some or all features of a live stock market on a computer so that a player may practice trading stocks without financial risk.

Types

Stock market simulators can be broken down into two major categories - financial market simulators, and fantasy simulators.

Financial simulators

Financial market simulators allow users to generate a portfolio based on real stock entries, but with fantasy money. Most of the currently active financial simulators use a delayed data feed of between 15 and 20 minutes to ensure that users cannot use their data to trade actively on a competing system. The purpose behind such a system is to let a person practice with fantasy funds in a real-world context so they can determine whether or not they would gain money investing by themselves.

Fantasy simulators

Fantasy simulators trade shares or derivatives of real world items or objects that normally would not be listed on a commodities or market exchange, such as movies or television shows. Some simulators focus on sports and have been linked to active betting and wager based systems.

Technology and implementation

Most of the online stock simulators run on either Java, JavaScript, ASP or php with a mysql database. Some of them are open source, and others are proprietary with the code being sold as valuable prediction market software. Such is the example with the HSX Virtual Specialist. This technology has been sold to major film studios such as MGM and Lion's Gate Films, as well as to the Popular Science team for use in their PPX system. [ [http://www.popsci.com/popsci/whatsnew/e77ff35e5990e010vgnvcm1000004eecbccdrcrd.html The Science behind PPX] ]

Stock Market simulator engines can also be customized for other functions than just basic stock information tracking. The HSX engine has been modified to track popular science trends and also to track Youtube videos. Other applications that can be implemented with this software include popularity tracking and ranking from a set scale rather than an actual numerical value.

Stock market games

Stock market games are speculative games that allows players to trade stocks in a virtual or simulated stock market.

Stock market games exist in several forms but the basic underlying concept is that these games allow players to gain experience or just entertainment by trading stocks in a virtual world where there is no real risk. Some stock market games do not involve real money in any way. Players compete with each other to see who can predict the direction the stock markets will go next. Many stock market games are based on real life stocks from the Nasdaq, NYSE or other major market indexes.

Stock market games are often used for educational purposes to teach potential stock traders and future stock brokers how to trade stocks. A stock market game is a perfect way to learn how to trade stocks without the risk of losing real money. According to Global Stock Game, over 15,000 schools have used their stock simulation game to teach students GSG [http://investsmart.coe.uga.edu/C001759/lesson/lesson1.htm] Global stock game(2004)] .

Some Stock market games are not based on financial markets at all. These virtual stock markets are often based on things like sports or entertainment 'stocks'. Players are asked to invest in a particular sports team for example.If the team is doing well, the stock goes up and if the team is playing badly the stock value for that team falls. Stock market games are often built in to many other prediction games.

Video stock exchange

A video stock exchange is a predictive market which predicts the popularity of user generated video content. The exchange is modelled after real life stock markets. Real life company stocks are valued based upon predictions of future company earnings, while videostocks are valued based upon predictions of a video's future viewings.

The Videostocks are IPOed onto the site by traders and an initial IPO stock value is assigned by the automated market maker. The traders then buy and sell the stock according to the traders opinion of its future payout. Videostocks delist and payout videodollars to all share owners after a predefined short period of time. For example, a period of one week could be used as the basis for a stocks value with the payout being one videodollar for each 1000 views achieved on the video sharing site.

The concept of a video stock exchange is similar to other predictive markets and fantasy sports games

The first video stock exchange, VideoIPO.tv launched into beta during June 2007 using technology powered by the Hollywood Stock Exchange

References

External links

* [http://www.dollarsandsense.org/archives/2001/0301maier.html Teaching About Stocks for Fun and Propaganda] critical article about using these games in High School classrooms. From Dollars & Sense magazine
* [http://dir.yahoo.com/Recreation/Gambling/Web_Games/Financial_Markets/ Financial Markets Web Games] from [http://dir.yahoo.com/ Yahoo!]
* [http://www.dmoz.org/Business/Investing/Games/ Investing Games] from [http://dmoz.org Open Directory]


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