Simulation Report

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  • Topic: Stock, Option, Financial ratio
  • Pages : 3 (1150 words )
  • Download(s) : 972
  • Published : April 23, 2012
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SIMULATION REPORT

The objective of the project was to trade on a Market Simulation “STOCK TRACK”, from 2/13 to 4/20. We were supposed to try to trade different types of instruments in order to gain more knowledge about they are trade in the real world; and how a strategy which seems good can be overturned by the market circumstances. During this period as a conservative, I tried to trade less risky instruments. The qualities that I used to select my instruments are the following: * Recommendation from Yahoo, TD Ameritrade and other websites. * Price pattern

* High or moderate P/E ratio
* Seasons (spring, summer, fall and winter) for the commodities * Class lessons on option for option strategies
I used the seasons to buy 2000 of iPath S&P GSCI Crude Oil Total Return Index ETN and 10 April futures on gaz. I used the thought that as we were still in winter when the project began that people would use more oil and gas at this period. Thus, I bought them and held them for this period and got higher profit on these instruments. But as soon as the weather change I began to get higher losses on the futures and I decided to sell so that save some of my profit. I held the oil stocks. I bought 10 December futures on gas using the same theory. I held on to the oil stock because they are more stable except the last fall in price, they were my more stable stock during all the simulation.

I used the recommendation from yahoo, and TD Ameritrade in making the decision of buying SPDR S&P500 ETF Trust Units Series -1- (SPY). In fact, they were advising that it was good advantage to have an open position on this ETF. So I bought some of these stocks and I sold them back when their price increased. But I used my own intuition to buy them back when all the prices and indexes when down to profit from a price arbitrage when S&P 500 will go up.6

I bought the Google Apple stock...
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