1. Eligibility
This simulation is available only to USEK students.
2. Capital Markets
You can buy, sell, buy on margin, and sell short actively traded NYSE, AMEX, and NASDAQ stocks (common and preferred) that are priced at $3.00 or more. You can also trade certain foreign stocks trading on exchanges such as London, Paris, Frankfurt, Tokyo, Hong Kong, Taiwan, Sydney, South Korea, Mexico City, and others. Adjustments will not be made for any cash dividend less than $0.10 or any stock dividend less than 2%. Bulletin Board and Pink Sheet stocks cannot be traded; IPOs are available around noon on the day of the initial offering.
3. Trading
Online Stock, option and future trades will be processed at 20 minute delayed prices. The cutoff times for US and Canadian trades is 4 p.m. ET, and the cutoff times for the global exchanges is based on the closing times for each exchange. Any trade made after that time will be processed the next business day. The maximum number of shares each student may trade for any security is limited to one-half of the actual volume of that security on that day. During the course of the challenge, participants may make up to an aggregate of 300 trades (each buy counts as a transaction and each sell counts as another transaction).
4. Trading Terminology
There are four basic ways in which securities can be traded. They can be bought, sold, sold short, and covered. For a long position, you “buy” to open and then “sell” to close. For short positions, you “short or write” to sell a security that you do not own and then “cover” to close.
5. Commission
A brokerage commission is applied to all transactions. The commission for online trades is a flat $25. For other trades, the commission is $50 plus $5 per 100 shares or $5 per contract. Commissions will be charged to both opening and closing transactions.
6. Margin Requirements
The margin requirement for stock purchases and short sales is 50%. This means that for stock purchases you can borrow up to 50% of the total cost. For short sales, you must deposit an amount equal to 50% of the current market value of your short positions. The margin requirement for writing stock options has been simplified to $1,000 per naked contract or $5,000 for writing naked index options. The margin requirement for trading futures contracts ranges from $400 to $20,000 per contract. The margin requirement for writing futures options is $2,000 per contract.
7. Interest Earned & Charged
Interest will be earned on all available cash balances at a rate of 3% and credited daily. The rate of 8% per annum will be charged on all loan (margin) balances and debited daily.
8. Calculation of Equity
A portfolio's equity or value is calculated as follows:
Cash - Debit bal. + Credit bal. + MV of long positions - MV of short positions
Where Debit = loan balance, Credit = short sales proceeds, and MV = current market value.
9. Disputes & Errors
Given the nature of stock price quoting services, prices may vary among sources at any given time. If current prices are not available for any reason, transactions may be posted at the latest pricing date available. Keep copies of your online confirmations. If you believe an error has been made on your account, please call Stock-Trak with the confirmation number (otherwise nothing can be resolved) at 1-800-786-TRAK during business hours.
10. End of Challenge
You do not need to convert all of your investments to cash on the last trading date. Your portfolio will be valued at the closing prices for that date.
These rules are subject to modifications without notice.