STOCKADE+
TABLE OF CONTENTS
LOGIN PAGE..................................................................................................................................................................18
II.
MY PORTFOLIO ............................................................................................................................................................19
III.
STOCKS ........................................................................................................................................................................20
IV.
V.
RANKING .......................................................................................................................................................................22
VI.
ANNOUNCEMENTS .......................................................................................................................................................23
2 | ALBA 2012
STOCKADE+
I. INTRODUCTION TO THE STOCK MARKET
of
different
corporations
are
bought
and
sold.
No.
PLCs
offer
their
shares
to
the
public
at
large.
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STOCKADE+
Source:
PSE Academy
<http://www.pseacademy.com.ph/LM/investors~details/id1316273868284/Who_are_the_Market_Participants.html>
STOCKADE+
Source:
PSE Academy
<http://www.pseacademy.com.ph/LM/investors~details/id1316273868284/Who_are_the_Market_Participants.html>
STOCKADE+
SHARE
corporation.
OF
STOCK is
When
you
literally
buy
share
stocks
of
in
the
PLC,
ownership of the
you
become
Being a stockholder
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STOCKADE+
ACCORDING TO SECTORS:
The PSE classified the stocks listed and traded in the stock
market into six. This categorization allows analysts to
determine the status of each industry. If there is a new
development in the industry, stocks of the companies within the
industry will be affected.
(1) FINANCIAL
(2) INDUSTRIAL
(3) HOLDING FIRMS
(4) PROPERTY
(5) SERVICES
(6) MINING AND OIL
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STOCKADE+
ACCORDING TO CHARACTERISTICS:
Analysts generally describe stocks as:
(1) BLUE CHIP
These are shares of well-established and financially
sound companies. They demonstrate ability to pay
dividends in both good and bad times. They also
exhibit more modest but dependable returns. (Minimal
changes in stock price, steady returns)
(2) GROWTH or glamour stocks
These are shares of companies whose earnings are
expected to grow at above-average rate relative to the
market. These corporations do not usually issue
dividends because earnings are reinvested in capital
projects. (High possibility of changes in stock price,
minimal returns)
(3) DEFENSIVE
These are shares that provide stable earnings
regardless of the condition of the market. Generally,
these are stocks of food, oil, and utilities companies.
(steady returns)
(4) SPECULATIVE
The values of these shares rise quickly when economic
growth is strong and fall rapidly when growth is slowing
down. (high risk)
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STOCKADE+
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Now you know that you can earn by the increase in the market price of stocks. The next question is, when
or how does the market price increase? What affects the increase or decrease of the price?
The answer lies in our basic knowledge of Economics: Supply and demand moves prices.
The house analogy by Andrew Horowitz is a good way of explaining this.
For example, SELLER decides to sell his house. He OFFERS the house for P600,000 because he
wants to sell at the highest possible price. BUYER wants to buy the house but wants to pay as low as
possible to get what he wants. He places a BID of P300,000.
In the stock market, the price given by the SELLER is called the OFFER or ASKING PRICE while the
price given by the BUYER is called the BID. The difference between the two prices is called the BID/OFFER
or BID/ASK SPREAD. When the buyer and seller agree upon a fair price and transact, then, a TRADE occurs
and the house is sold.
In the course of the negotiations, there may be 3 scenarios:
First, the BUYER is aggressive to find a house because he recently relocated with his family and
cannot afford waiting around. When the SELLER offers the house at P600,000 and refuses to drop the price
down to the bid, the buyer must decide whether to pay P600,000 or walk away.
Second, the SELLER is aggressive in selling the house because he must relocate to a new city
immediately. Reluctantly, he agrees to the BUYERs bid price of P300,000 and they trade.
Third, neither BUYER or SELLER is in a hurry to buy or sell, and eventually, they agree to
compromise at P450,000.
After every 5 years or so, the house will be resold. Over a period of 30 years, the actual sale price of
the house can be charted.
In the stock market, the stocks are sold not every 5 years but every second. That is how prices are
charted on a short term basis. The logic of the sales of both house and stocks are the same. The difference
is that stocks change hands many times per second and there are more than one buyer and seller.
So, for more liquid or in demand stocks, the BID/OFFER spread is very slim and prices dont
fluctuate much. As for less liquid stocks which have fewer buyers and sellers, the BID/OFFER will be wider.
STOCKADE+
Aside from the negotiation between the buyer and seller, other factors also affect the
market price of stocks. Among which are:
INFLATION Inflation is the rise in prices. When inflation is too high, consumers tend to
spend less, thus, the company does not earn much. In effect, investors lose confidence
in the company and sell their shares. Because the company does not earn much, there
is not much demand for the stocks. Thus, stock prices go down.
EARNINGS When a company is earning profits, everyone wants a piece. However, when
the companys products are out of trend, demand will go down. When the companys
profit decreases, stock price decreases. Investors lose confidence in the company
and sell their stocks, thus, causing the value of the stock to decrease.
ENERGY PRICES Demand for energy is constant. Unless a major change occurs which
changes the demand or cost of energy, then, stock prices will move only slightly.
OIL PRICES Oil is important in everyday life. However, when oil prices are high, people
tend to find alternative means. Thus, demand for oil decreases and oil companies earn
less. Effect to the stock market is the same as above.
INTERNATIONAL AND DOMESTIC ISSUES When there is unrest, crimes, fraud, or issues
of corruption, businesses make less money and investors either do not invest or dump
out their stocks. The effect is a fall in the market. The more investors there are, the
more fluid the stock market will be.
FEAR Aside from all the issues above, investors are also afraid of losing their money.
Thus, when investors see that the prices of their shares are decreasing, they tend to
withdraw their investment and sell the same even at a price lower than their buying
price.
You may notice that this list of other factors still follow the supply and demand
framework. As you may notice by now, the stock market is not that hard to
understand.
12 | ALBA 2012
STOCKADE+
is
earning.
market tools
News
can
help
articles,
you
trend
make
analyses,
well-informed
and
other
investment
decisions.
If you intend to be a short-term trader, you need to look into
real-time news.
need
to
look
strong
economy
and
company
potential
for
growth.
Click the photos on the right side to visit the websites of these
business
articles.
There
are
also
other
resources
on
the
Information is everywhere.
13 | ALBA 2012
STOCKADE+
STOCKADE+, the
participants.
information
in
this
primer
is
sufficient
to
guide
the
the
like.
One
particularly
useful
site
is
the
PSE
A CADEMY.
It
It
There are a lot more to learn such as technical analysis, trading platforms and the like. Simply, technical
analysis is charting the OFFER/BID based on different market factors over a period of time. Trading
platforms provides the virtual trading floor wherein buyers and sellers come together to trade stocks.
When reading more on the stock market, dont get too caught up on the business jargon. Remember
that the market is simple as offering to sell and bidding to buy a house.
NOW, YOU ARE READY TO PLAY!
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STOCKADE+
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STOCKADE+
WELCOME TO STOCKADE+
In this competition, the participants will put their knowledge at
play.
STOCKADE+
is
participants
will
simulated
buy
and
sell
stock
market
stocks
competition.
of the
The
listed companies.
TRADING
is 12nn-11pm
from
Mondays
to
Fridays.
Thus,
As an
extra incentive, the player with the highest net portfolio at the
end of two weeks will win as much as P7,000.
Have fun and good luck!
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STOCKADE+
6 PAGES
In this chapter, you will be guided through the pages in our simulation program.
The program has 6 pages.
LOGIN PAGE
MY PORTFOLIO
STOCKS
BUY STOCKS
RANKING
ANNOUCEMENTS
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STOCKADE+
I.
LOGIN PAGE
When you press the link, you will see this page:
Simply input the USERNAME and
PASSWORD provided to you.
Then, you will be directed to your
personal page.
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STOCKADE+
II.
MY PORTFOLIO
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STOCKADE+
III.
STOCKS
In the pages panel, click STOCKS and you will see this page:
The STOCKS PAGE displays 56 publiclylisted corporations.
You can see the increase/decrease of
values of stocks since the previous
day. (see HISTORICAL VALUE, CURRENT
VALUE and % of change).
Let
Buy
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STOCKADE+
IV.
BUY STOCKS
When you click the BUY button, this page will appear:
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STOCKADE+
V.
RANKING
When you click the RANKING PAGE, you will be directed to this:
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STOCKADE+
VI.
ANNOUNCEMENTS
When you click the ANNOUNCEMENT PAGE, you will be directed to this:
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STOCKADE+
Dec
14
(Fri)
11pm.
Winners
will
be
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STOCKADE+
ANNEX:
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STOCKADE+
SOURCES
http://www.fi-advisor.com/what-is-stock-market.asp
http://www.pseacademy.com.ph
http://www.pseacademy.com.ph/LM/investors~details/id-1316267745169/What_are_STOCKS.html
http://winninginvestor.quickanddirtytips.com/how-do-stock-prices-change.aspx
http://money.howstuffworks.com/personal-finance/financial-planning/stock-market-trends1.htm
http://www.stockmarketero.com/p/stock-market-tools.html
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