Stock Trading
Overview of the Game
1. What is stock trading competition?
2. When can we start trading?
3. How is it played?
4. How many members are allowed to play in a team?
5. Are we not allowed to trade beyond the trading hours set by PSE?
Trading Tip and Tricks
What are stocks?
Where can I buy shares of Stocks and/or Bonds?
How can I profit in the stock market?
Capital Gains
Cash Dividend
Stock Dividend
Stock Rights
What is the minimum amount needed to invest in the stock market?
Trading stocks is done though board lot or round lot system, which means there is a minimum number of shares one can buy or sell at a specific price range.
Therefore, the minimum amount needed to invest in the stock market varies and will depend on the market price of the stock as well as its corresponding board lot. The board lot differs as the price of stocks move through a scale of minimum fluctuations.
New Board Lot Table
The PSE uses a Board Lot table that specifies the minimum number of shares one can buy or sell at a specific price range.
1. What is stock trading competition?
- Stock trading competition is a game that allows students to experience firsthand how it is to trade stocks, develop investment strategies and learn how the stock market works.
2. When can we start trading?
- The tournament shall begin on January 9, 2012. Teams may start trading stocks on the said date. For each day, teams may only trade according to PSE trading hours; that is they could only trade from 9:30 am to 1:00 pm. Trading shall end on February 3, 2012.
3. How is it played?
- On January 7, 2012, a symposium will be held to teach the participants the basics of stock trading. Buying and selling of orders by teams composed of students from participating schools shall be executed online.
4. How many members are allowed to play in a team?
- Each team is allowed to have 3 to 5 members and schools may send as many teams as they want.
5. Are we not allowed to trade beyond the trading hours set by PSE?
- Teams may still trade or post buying and selling orders beyond the given time but these orders will only be executed and counted on the following day. However, orders made after the trading hours on February 3, 2012 shall not be counted since the competition will end on the said date.
Trading Tip and Tricks
What are stocks?
- Stocks are shares of ownership in a corporation. When you become a stockholder or shareholder of a company, you become part-owner of that company.
Where can I buy shares of Stocks and/or Bonds?
- In the Philippines, the only operating stock exchange is the Philippine Stock Exchange (PSE). Its main function is to facilitate the buying and selling of stocks and other securities through its accredited trading participants.
- The PSE has two trading floors – PSE Centre in Ortigas, Pasig City and PSE Plaza in Ayala, Makati City – where trading participants trade daily – from 9:30 a.m. to 1:00 p.m. except Saturdays, Sundays, legal holidays and days when the Central Bank Clearing Office is closed.
How can I profit in the stock market?
- Investors can profit in the stock market through any or a combination of the following:
Capital Gains
- These are profits made due to an increase in the market price of a stock from the buying price.
Cash Dividend
- A dividend is given to shareholders in the form of cash. It is computed by multiplying the number of shares held by the cash dividend rate declared.
Stock Dividend
- A dividend is given to shareholders in the form of additional stocks. It is computed by multiplying the number of shares held by the percentage of the stock dividend declared.
Stock Rights
- Stock rights offering is the option given to the present shareholders to buy additional shares of stock at a price lower than its market price.
What is the minimum amount needed to invest in the stock market?
Trading stocks is done though board lot or round lot system, which means there is a minimum number of shares one can buy or sell at a specific price range.
Therefore, the minimum amount needed to invest in the stock market varies and will depend on the market price of the stock as well as its corresponding board lot. The board lot differs as the price of stocks move through a scale of minimum fluctuations.
New Board Lot Table
The PSE uses a Board Lot table that specifies the minimum number of shares one can buy or sell at a specific price range.
The Minimum Fluctuations column shows the minimum increments that a stock price can change.
Let’s use, for example, PLDT (Stock Code: TEL)’s closing price in November 9 which is P2,995. This price can move a minimum of P5 according to the Board Lot Table. That means TEL can, at a minimum, increase to P3,000 or decrease to P2,990. Its price cannot change to P2,998 or P2,992.50.
The Board Lot column shows the minimum number of shares a stock in a particular price range can be traded.
Trading Schedule
Currently, trading hours are divided into:
What are the different types of stock trading orders?
The two commonly used types of trades that meet one’s stock trading requirements and objectives — market order and limit order
By the time the order is actually executed, the market price may be higher or lower. For example, you called your broker to purchase 1,000 shares of Philex Mining Corporation (Stock Code: PX). At that time of the call, PX may be trading at P11.00, but when the market order is actually executed, the price of PX could have been P11.25 or P10.75.
Assume that the stock price of Bank of the Philippine Islands (Stock Code: BPI) is P55.00. You do not want to pay more than P53.00 per share so you place a limit order to execute at P52.50.
If BPI’s price falls to P52.50, your order will be executed. The risk here is that if the price continues to decline, you will suffer losses if your limit order was executed at a higher price. For example, if your limit order for BPI shares were executed at P52.50 but the stock further declined to P50.00, you are already sitting with a P2.50-per-share paper loss.
Courtesy of http://www.pinoymoneytalk.com/
Let’s use, for example, PLDT (Stock Code: TEL)’s closing price in November 9 which is P2,995. This price can move a minimum of P5 according to the Board Lot Table. That means TEL can, at a minimum, increase to P3,000 or decrease to P2,990. Its price cannot change to P2,998 or P2,992.50.
The Board Lot column shows the minimum number of shares a stock in a particular price range can be traded.
Trading Schedule
Currently, trading hours are divided into:
- 9:00 am to 9:30 am – Pre-Open
- Orders can be entered but matching will not yet occur.
- 9:30 am to 1:00 pm – Open Period
- The Exchange is accepting orders and matching is occurring.
- 1:00 pm to 1:10 pm – Run-off Period
- Not accepting orders but matching of remaining trades is occurring.
- 1:10 pm – Market Close
- Closed with no ordering and matching allowed.
What are the different types of stock trading orders?
The two commonly used types of trades that meet one’s stock trading requirements and objectives — market order and limit order
- 1. Market Order
By the time the order is actually executed, the market price may be higher or lower. For example, you called your broker to purchase 1,000 shares of Philex Mining Corporation (Stock Code: PX). At that time of the call, PX may be trading at P11.00, but when the market order is actually executed, the price of PX could have been P11.25 or P10.75.
- 2. Limit Order
Assume that the stock price of Bank of the Philippine Islands (Stock Code: BPI) is P55.00. You do not want to pay more than P53.00 per share so you place a limit order to execute at P52.50.
If BPI’s price falls to P52.50, your order will be executed. The risk here is that if the price continues to decline, you will suffer losses if your limit order was executed at a higher price. For example, if your limit order for BPI shares were executed at P52.50 but the stock further declined to P50.00, you are already sitting with a P2.50-per-share paper loss.
Courtesy of http://www.pinoymoneytalk.com/