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| New Game, New Calculations, Input NEEDED! |
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| Trading Simulator |
 Posted: Tue Jul 26, 2005 4:53 pm Post subject: New Game, New Calculations, Input NEEDED! |
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Investing Sr. Associate
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| Bankman wrote: | | So there are no plans to fix the method of calculation so that it reflects actual portfolio value return percentage? |
Yes, there are. However, we will have to collect additional data in order to make this happen, so it's not likely that we will start out with the "correct" calculation at the beginning of next month. Read on for details.
Here's a rough idea of what is in store, as well as the schedule. At the end of July (which happens to occur over a weekend so the markets will all be closed) we will "close out" everyone's eInvesting portfolio. Your holdings - if still open - will be closed at the last market price, and the proceeds deposted back into your eInvesting$ account. Your portfolio and trading history will both be emptied. We will, as you can see, truly be starting over in August. You will not be charged trading commissions for your holdings during this liquidation process. If you want to sell your holdings prior to the end of the month to hit a certain price, by all means do so.
In August there will be some new trading rules. You will not be able to purchase stocks under $2 per share. We will - at least on a temporary basis - be disallowing options trading. We hope to reinstate options trading later this year, although we don't have a specific target date yet. You will be able to sell stocks that dip below $2 per share, but you will not be able to purchase them. The trading simulator will also not allow you to purchase any stock with a "dot" in the symbol. Again, you will be able to sell such stocks should you purchase something that gets dropped from the exchange, but you will not at this time be able to purchase them.
These decisions have been made by the administrators of this board in order to simplify things a bit while we retool some of the existing features and consider additional features for the simulator. As has already been mentioned, we will not be altering the way we calculate the percent return on individual holdings. We will, however, track a "true" gain in your portfolio. You will be able to view your LTD (Life to Date), YTD (Year to Date) and MTD (Month to Date) % returns on your portfolio. We are investigating the idea of paying interest on a monthly basis on your "cash" balance. Deposits from posting, donations, or other sources will be treated as "deposits". Deposits from stock proceeds will be gains or losses. But before I post an actual formula, I would like to get some numbers / formulas from some of you folks.  We may or may not take all suggestions on how the portfolio numbers should be calculated, but we want to be sure that everything that should be considered is at least considered.
Point 1... deposits from posting should be considered as deposits and not income. You can't inflate your portfolio return simply by posting a lot, nor will people that don't post much be penalized.
Point 2... the portfolio return will - as it is today - be recalculated on an hourly basis on market trading days.
So here are a few examples. Tell me how you would calculate the portfolio return for the following eInvesting members. All time frames are for one calendar month. Deposits include posting rewards or donations or anything else other than stock sales. When there are two numbers the first is e$ and the second is portfolio holdings value. I know how I would calculate these numbers, I would like to see who else has the same (or different) ideas. Side note to eInvesting Admin... perhaps this post and its replies could actually be split to a new topic? Or do you want to leave it here?
Carl Conservative
Beginning Balance $10K / 0$
Deposits from Posting $2K
Ending Balance $12K / 0$
Sad Sam
Beginning Balance $10K / $5K
Deposits from Posting $2K
Stock Purchases $11K
Stock Sales $2K
Ending Balance $3K / $2K
Super Suzy
Beginning Balance $10K / $10K
Deposits from Posting $2K
Stock Purchases $5K
Stock Sales $0K
Ending Balance $7K / $21K
Active Aaron
Beginning Balance $10K / $2K
Deposits from Posting $8K
Stock Purchases $15K
Stock Sales $9K
Ending Balance $12K / $8K
This post does not necessarily contain all the changes / improvements that we hope to see over the coming weeks for the simulator. Your feedback on the items mentioned so far will be appreciated. Thanks. |
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| Bankman |
| Posted: Wed Jul 27, 2005 9:46 am Post subject: Re: New Game, New Calculations, Input NEEDED! |
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Investing Associate
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| Trading Simulator wrote: | | Point 1... deposits from posting should be considered as deposits and not income. You can't inflate your portfolio return simply by posting a lot, nor will people that don't post much be penalized. |
For purposes of the contest, it may be easier to just set aside the eInvesting$ that are earned after the creation of a portfolio. Any posts/donations/additional eInvesting$ income that are earned in the month of the current will be set aside in a separate account and are not allowed to be invested until the contest is over.
For example, a new contest begins on August 1st.
- Bankman has $10,000 in his current portfolio.
- Bankman makes several posts and currently has $12,000 eInvesting$. The additional $2,000 eInvesting$ must be placed in a separate account that cannot be used for additional investments and will not count towards the calculation of the portfolio return %.
- Bankman utilizes the money in his current portfolio ($10,000) and ends up with $11,000 at the end of the contest.
- A simple equation of [(Ending Portfolio Value - Beginning Portfolio Value)/Beginning Portfolio Value] * 100 will give you the true portfolio return. In this case, it is [($11,000 - $10,000)/$10,000] * 100 = 10%.
- At the start of the next contest, all the eInvesting$ earned will be credited towards the new portfolio account. So my beginning portfolio balance on September 1st will be the Ending Portfolio Value in August + eInvesting$ Earnings from the month of August. $11,000 + $2,000 = $13,000 (Beginning Portfolio Balance in September).
This is only a suggestion. There is more than one way of doing this, but the current way of calculating Portfolio Return % is not representative of the true increase in value. |
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| Trading Simulator |
| Posted: Wed Jul 27, 2005 2:07 pm Post subject: Re: New Game, New Calculations, Input NEEDED! |
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Investing Sr. Associate
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| Bankman wrote: | | For purposes of the contest, it may be easier to just set aside the eInvesting$ that are earned after the creation of a portfolio. Any posts/donations/additional eInvesting$ income that are earned in the month of the current will be set aside in a separate account and are not allowed to be invested until the contest is over. |
Well, I don't have final say on this (the admin does) but I don't see this working out at all. The trading simulator is one of the things that makes this site unique. If we take this suggestion, then a new user can't join in the contest or make any trades until the start of the next month, since all of their "deposits" are on hold until the start of the next game session. So if I join on the 2nd, I'm extremely bored.  That's not the intent of the game at all, and why I don't think your proposal would work for the long run.
| Quote: | - Bankman utilizes the money in his current portfolio ($10,000) and ends up with $11,000 at the end of the contest.
- A simple equation of [(Ending Portfolio Value - Beginning Portfolio Value)/Beginning Portfolio Value] * 100 will give you the true portfolio return. In this case, it is [($11,000 - $10,000)/$10,000] * 100 = 10%. |
You're only looking at cash. You need to also take into account gains or losses in the portfolio holdings. We don't liquidate (with the exception of this month coming up) your holdings at the end of every month. So your scenario isn't complete... that's why I posted the ones I did.
Which everyone is - so far - ignoring. 
| Quote: | | ... the current way of calculating Portfolio Return % is not representative of the true increase in value. |
As we know, and are trying to fix. But I'm looking for confirmation that the procedure we put in place for the next round will be acceptable and correct.
Thanks, Bankman, for your input so far. At least you have offered some suggestions. C'mon folks, anyone want to take a stab and creating a formula for determining the monthly return for the samples as provided? |
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| Grimreaper |
| Posted: Wed Jul 27, 2005 4:58 pm Post subject: |
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CFO
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I'd give you some input but to be honest witcha, you have me as confused as freeye did when he tried to outline his Jim Cramer Mad Money trade simulator I'll just let the games begin and go from there, hopefully we will be allowed to trade short positions and not just longs, that way at least we will have tons of opportunities for fun and profit, otherwise you are going to force me to put all my eggs in the one or two baskets that are worth playing to the long side under current market conditions  |
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| Dave Rathbun |
| Posted: Wed Jul 27, 2005 5:35 pm Post subject: |
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CFO
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It's not confusing, just take the numbers. For example: | Quote: | Carl Conservative
Beginning Balance $10K / 0$
Deposits from Posting $2K
Ending Balance $12K / 0$ |
He didn't do anything but post. 12K ending balance - 2K in deposits = 10K net for the month. 10K ending balance - 10K starting balance = 0% return.
| Quote: | Active Aaron
Beginning Balance $10K / $2K
Deposits from Posting $8K
Stock Purchases $15K
Stock Sales $9K
Ending Balance $12K / $8K |
Starting balance = $12K (cash + holdings)
Ending balane = $20K (cash + holdings)
Cash from deposits = $8k
Net gain for month = $20K - $8K = $12K
Return % = 0%... he traded all month long, but ended up right where he started. His holdings went up by $6K, but he invested $15K and sold $9. There must have been some losses along the way to make these numbers work.
| Quote: | Super Suzy
Beginning Balance $10K / $10K
Deposits from Posting $2K
Stock Purchases $5K
Stock Sales $0K
Ending Balance $7K / $21K |
Starting balance $20K
Ending Balance $28K
Remove deposits of $2K and you have $6K gains over $20K value at the beginning of the month, or 30% return.
My formula is (Ending Balance - Deposits - Starting Balance) / Starting Balance
Starting Balance = Starting Cash + Starting Holdings Value
Ending Balance = Ending Cash + Ending Holdings Value
Does this sound like it works? |
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| Grimreaper |
| Posted: Wed Jul 27, 2005 5:58 pm Post subject: |
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CFO
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| I dunno Dave, and I'm not too concerned about it to be honest witcha, like I said befo, let da competition begin, let da chips fall where they may, take no prisoners, all dat good chit! I hope you agree cause me likes to keep it simple |
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| Dave Rathbun |
| Posted: Wed Jul 27, 2005 6:07 pm Post subject: |
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CFO
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| Grimreaper wrote: | | I dunno Dave, and I'm not too concerned about it to be honest witcha, like I said befo, let da competition begin, let da chips fall where they may, take no prisoners, all dat good chit! I hope you agree cause me likes to keep it simple |
 Yeah, I guess. But I'm guessing that those that don't provide feedback at this stage lose their right to whine about things later on. |
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| Grimreaper |
| Posted: Wed Jul 27, 2005 6:30 pm Post subject: |
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CFO
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| So what? let em whine, if EI doesn't solve the problems with the 20 minute time delay this game is going to be nothing but a joke anyway, so I might do some whinin meself, the whole concept for the site should be a place for people to express their opinions about the various markets, hopefully the possibility of cheating will be eliminated in the next round, that will eliminate alot of people who are here for the wrong reason, like most of the people leading the pack right now I am sure, which means we can get down to bidness! if the game is fair I promise it will bring in more people who actually have some insight into the markets over here, if for no other reason than the fact that the system is the closest there is out there to actual real $$$ trading so it really is alot of fun, I sure hope things work out |
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| Benjamin |
| Posted: Thu Jul 28, 2005 3:43 am Post subject: |
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Administrator
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Trading Simulator,
Do you believe putting all trades in on a 20 minute delay would cause a backup in trades and create issues?
All,
Creating the delay (as grim pointed out) would make the simulator much more lifelike and much more difficult to cheat with.
Lifelike/fairness aspects would then be:
-20 Minute delay of all trades requested
-$10 commission fee on all trades
-No more pennies or stocks with a . in them
-$2 minimum stock purchase
These rules will benefit all in the longrun. Professionals might be bored but I doubt it...
This Sim is supposed to be what you would do with the real market and see how you would do trying different things. Not an options and penny stock simulator that throw the math off and you can't see how you are REALLY doing compared to everyone else.
Thanks for everyones input! |
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| Trading Simulator |
| Posted: Thu Jul 28, 2005 4:10 am Post subject: |
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Investing Sr. Associate
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| eInvesting Admin wrote: | Trading Simulator,
Do you believe putting all trades in on a 20 minute delay would cause a backup in trades and create issues? |
I don't think so. Actually, there are several advantages to this idea. We could offer limit orders as well as market orders. A limit order allows you to set a strike price that you want to trade at, which would let people come to the site, enter their order, and then get back to work  without worrying about their trade. If / when their stock hits their strike price, the trade is executed. People can place "Day" or "GTC" (Good 'Till Cancel) orders. If a member places a trade and changes their mind within 20 minutes (or longer, if a limit order is placed) then they can cancel the order.
I agree that trading on a delayed basis would make the game more fair. It would mean that the eInvesting "Market" is open from 9:20 to 3:20 eastern time only. It would mean that we can offer both market and limit orders. I think it's definitely worth considering. It would require a script that runs every minute to check for open trades. If it becomes a server load issue, we can put a limit of 100 trades per minute or something like that, after we benchmark the system to see how many trades can actually be performed in 60 seconds.
| Quote: | | This Sim is supposed to be what you would do with the real market and see how you would do trying different things. Not an options and penny stock simulator that throw the math off and you can't see how you are REALLY doing compared to everyone else. |
I agree. |
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| Grimreaper |
| Posted: Thu Jul 28, 2005 4:10 am Post subject: |
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CFO
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| Hi Mr EIA, what I am saying is that if your system you use now is kept for the new competition there will be people who use AH news to game the system, look at LSI for instance, the news came out AH, if you were playing the new game (assuming shorting is allowed) you could simply put LSI upas a trade last nite or even at 9:40 AM today when the stock was down 7% and use the delay to your benefit, and some stocks move much more than 7% on news in AH trading, the only solution is to allow buying with limits only, that could be used even if there is a 20 minute delay, of course you could still game the system because many stocks make 20% moves up and down during the day, but it would make the cheating less important to overall results, the only solution would be to have each player set a buy/short limit, so if one sees LSI down from the 9.92 close you need it to trade back up to 9.92 if you want to chort, it'll be easy for you to spot the ones cheating with the delay during regualr hours trading, that's why I think everyones trading positions should be open for public inspection, just my own personal opinion though, if things work out OK I came up with a pretty decent idea to possibly help expand the member base too! |
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| Bankman |
| Posted: Fri Jul 29, 2005 3:38 am Post subject: Re: New Game, New Calculations, Input NEEDED! |
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Investing Associate
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| Trading Simulator wrote: | | Well, I don't have final say on this (the admin does) but I don't see this working out at all. The trading simulator is one of the things that makes this site unique. If we take this suggestion, then a new user can't join in the contest or make any trades until the start of the next month, since all of their "deposits" are on hold until the start of the next game session. So if I join on the 2nd, I'm extremely bored. That's not the intent of the game at all, and why I don't think your proposal would work for the long run. |
Actually, you don't need to isolate those who just joined. Since they just started, they would have a beginning balance of $1000.00 or whatever you decide it should be. They can trade with that, but additional posts or donations would not be able to be used for purposes of trading until the start of the next contest.
| Trading Simulator wrote: | | You're only looking at cash. You need to also take into account gains or losses in the portfolio holdings. We don't liquidate (with the exception of this month coming up) your holdings at the end of every month. So your scenario isn't complete... that's why I posted the ones I did. |
My equation is actually not just considering cash, and let me show you why. Keep in mind that we have kept the additional deposits in a separate account and cannot even be used for purposes of trading.
[(Ending Portfolio Value - Beginning Portfolio Value)/Beginning Portfolio Value] * 100
Carl Conservative
Beginning Balance $10K / 0$
Deposits from Posting $2K
Ending Balance $12K / 0$
[($10,000 - $10,000)/$10,000] * 100 = 0%
Sad Sam
Beginning Balance $10K / $5K
Deposits from Posting $2K
Stock Purchases $11K
Stock Sales $2K
Ending Balance $3K / $2K
[($3,000 - $15,000)/$15,000] * 100 = -80.00%
Super Suzy
Beginning Balance $10K / $10K
Deposits from Posting $2K
Stock Purchases $5K
Stock Sales $0K
Ending Balance $7K / $21K
[($26,000 - $20,000)]/$20,000] * 100 = 30%
Active Aaron
Beginning Balance $10K / $2K
Deposits from Posting $8K
Stock Purchases $15K
Stock Sales $9K
Ending Balance $12K / $8K
[($12,000 - $12,000)]/$12,000] * 100 = 0%
Keep in mind that with the equation
[(Ending Portfolio Value - Beginning Portfolio Value)/Beginning Portfolio Value] * 100
I had to discount the fact that there were deposits from posting, so that's why my ending portfolio values may seem a little different. |
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| guy |
| Posted: Mon Aug 01, 2005 6:46 am Post subject: |
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New Poster
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| I don't unerstand why you would exclude stocks with a . in them? |
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| Trading Simulator |
| Posted: Mon Aug 01, 2005 7:22 am Post subject: |
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Investing Sr. Associate
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| guy wrote: | | I don't unerstand why you would exclude stocks with a . in them? |
The name of the site is eInvesting not eSpeculating
The decision was made to eliminate OTC and Pink Sheet stocks from the simulator. This decision may be revisited at some point in the future. At the moment you will get a different error message if you attempt to purchase an option, which also has a "dot" in the symbol, as we do intend to bring back options trading. |
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| chahsiubow |
| Posted: Thu Aug 11, 2005 7:32 am Post subject: |
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Investing Sr. Associate
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| so could you explain how this works again? for each success trade/sell i make, it impacts my total portfolio regardless if i hold on to it or not? meaning... i was up 100 something percent at one point via BIDU. Now i'm down to ~6-7%, even though I only hold BIDU right now at ~35%. if buy another stock, and sell it right away, my total ranking drops to 4-5%? |
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