How the Day Works
The Team Challenge gives students first-hand experience of what it’s like to work on a trading floor in a simulated stock competition. The simulation will last 2 hours and cover 120 days of historical market data – broken down into two 60-minute sessions. Teams will begin with $100,000 to invest from a pool of over 100 stocks. The objective is to produce the highest returns.
Teams will work at a trading station where they will use a stock-trading application and research website to build, monitor, and rebalance their stock portfolio. Students work together using these tools to research stocks, review trends, and make investment decisions.
Prior to the start of the first trading period, teams will have 15 minutes to conduct research and submit their initial stock purchases. There are no portfolio constraints, caps, or limits on the number of transactions.
Once the trading period begins, it will advance by 5 market days every few minutes. Market conditions, stock prices and news will advance simultaneously in the trading application and research website. Teams will be able to review their portfolio gains and losses instantly. Once reviewed, teams can buy, sell or make adjustments to their portfolio.
Early on in the competition, students will have longer lengths of time to rebalance their portfolio. Time between segments will decrease by small intervals once students have learned how to use the tool.
A Portfolio Manager (PM) is responsible for making investment decisions and overseeing an investment strategy. PMs rely on Analysts to provide information about a company or industry when making investment decisions. PMs will:
- Listen to Analysts’ ideas and input, incorporating them into portfolio decision-making;
- Read and understand economic indicators and effect on portfolio performance;
- Decide which stocks to add/remove to portfolio;
- Monitor portfolio performance, asking Analysts for more information/research as needed throughout trading period.
An Analyst studies companies and industries and on that basis provides reports or recommendations to their Portfolio Managers. This information is then used by PMs in their investment decision-making process. Analysts will:
- Interpret economic indicators and analyze their likely effects on portfolio performance;
- Review information provided about companies/industries used in the Team Challenge and make buy/sell recommendations to the PMs;
- Provide PMs with information/research upon request.
In advance of the Magnetar Team Challenge, students study a special Team Challenge Lesson Plan. This way they come to the Challenge already equipped with an overview of the day, terminology, and team role planning.
The stocks and time period used will be announced to students at the beginning of each trading period on Team Challenge day. Therefore, researching stocks ahead of time for their competition portfolio is not a relevant preparation exercise.