Financial Derivates Simulation game

Online game

[cathalkenny]

Sony it is!!!

So I decided to expand back into the stock market. I read an article about Sony corporation . In the article it tackled why Sony will not try to bolster its market share in the US and China instead try and enlarge its market share in both Europe & Japan . Commentators are commenting positively about this.

http://www.forbes.com/sites/ewanspence/2013/10/13/sony-has-no-plans-for-the-us-smartphone-market-in-2014/

Having read the article I decided to analyse its performance in the Stuttgart market . As we can see below on the chart I feel like it has underachieved or is low in value over the past few weeks . Therefore I took the decision to buy a medium sized amount of shares in Sony corporation.

Lets hope the Germans will be good to me unlike what they done to our soccer team.

[cathalkenny]

Futures options market

Having both investigated into the options and futures markets , I thought it was about time I decided to expand my portfolio into the futures options market. Previously I was betting on the price of gold to go up , now i decided to bet on it sloping downwards . Therefore I decided to buy a put option on gold futures. 

With the shut-down in America still continuing, its difficult to know how volatile the prices are going to be in the nearby future. The US government have been given 24 hours to make a decision .

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/10381801/US-shutdown-Political-divisions-take-US-to-within-24-hours-of-debt-ceiling-deadline-with-no-deal-in-place.html

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Futures it is!!!

Having previously only invested in the the live cattle futures market , I decided to investigate into other futures markets. There was a lot of chit chat about futures so I was curious to find out more. With the stand off in the US budget I wasn't sure if i was a good or bad thing to start investing into this market. However , I was willing to take a few risks.

From there on , it was a tipsy and turvy ride . First of all I decided to invest in the Swiss franc . I felt due to the US budget coming up soon that the dollar would start to depreciate against the Swiss franc . However I hadn't much luck here with the dollar reach a one month high against the Swiss franc. This is outlined below in the small article.

http://www.reuters.com/article/2013/10/15/markets-forex-swiss-franc-idUSL6N0I516R20131015

Next on my agenda was to invest in gold . I done this on several occasions over the course of the last few days. I bought December future contracts every time . On each occasion I only left the contracts in for small amounts of time and kept a small eye on them . By doing so I had a bit of luck , but the profits were relatively low . 

Last but not least I decided to take a gamble on Crude Oil . Having analysed graphs on Crude Oil I felt it was under-priced at the time and had fallen a considerable amount over the past few weeks. Therefore I decided to invest in it. Within an hour my investment grew substantially and made me a very happy man.

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Yet another Put

I decided to buy a put option for Royal Bank of Scotland. The main reason I invested here was because they have gone well over they're one year target of 9.50 , with they're stock price now at 11.78. Therefore I feel they have progressed too much this year , hence I feel that they're stock price is going to fall soon.

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Futures!!!

So I decided to diversify into the futures market. I decided to purchase Live cattle futures. In all honesty this was just hit and hope. I learned that  a futures contract is a contractual agreement to buy or sell a particular commodity or financial instrument at a pre-determined price in the future.

I will be interesting to see what the outcome is with this random selection. Hopefully it will turn out to be a positive result!!!

[cathalkenny]

Change of mind

On one of my previous posts i decided to say I would look at call options . But Having come across and analysed Apple stock I decided to buy a put option here . Basically by analysing a 6 month graph I feel this is the correct decision at this time.

The current apple stock is currently prices at just over $480 . I bought the put deciding it would fall down to $455.

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Selling at last

So I decided to sell my put for Facebook shares . I bought the put at 2.54 per share and sold it at 3.70. Therefore I made a major portfolio profit . When purchasing the put the price of the shares were at a little bit over $50 dollars at the time but when i sold the put the price was at 47.06.  

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More positivity?

Since beginning this game I have executed two put options , which in a sense is negative . I purchased put options for both Vodafone and face book within the Nasdaq market . Only time will tell whether these were the right options at the right time.

However due to the US shut-down I feel this are the right options. During this shut-down , state workers were basically told not to turn up as they're wont be money to pay you . This shut-down will surely have a negative impact on the US market . AN article on this is outlined below.

http://www.irishtimes.com/news/world/us/what-s-happening-in-washington-government-shutdown-explained-1.1546098

I'm curious to know will this affect other markets also? Or will it have a positive impact!?! Only one way to find out . Next I am going to look into buying Call options .

[cathalkenny]

Putting again !!!!

Having analysed Vodafone's performance on the Nasdaq I felt they were over achieving . Not only was there P/E(ttm) standing above 253.86 , the value of their price jumped by 20% within the past two months .

Also , I used a technical indicator of this 3 month graph which shows us that the price of $32 is an appropriate price . Therefore i decided to buy a put option at $32. 

Already I feel the stock is on its way down with it falling by 0.81 % yesterday . Hopefully this downward curve will continue!!

Here is yesterdays graphs on its performance.

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Over-valued a bit?

My first decision in this account was to buy a put option on Facebook . I bought it at a price of a little over $50.The  P/E(ttm) was 227.5 which is well above the norm of 15. They're first year target stood at 48.85 which is considerably high also.

If we analyse the 6 month graph below we can see that since the middle of July that the price has taken a substantial jump in price . My prediction is that this price will come tumbling down

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Another Beginning!!!

Now that my 20 trades are over and done with on my buy and sell account , I start a new simulation game. This game will be a broader and more realistic game of financial derivatives . Here we will be aloud use stocks , options , mutual funds , futures , bonds and spots . Having previously done study on options in my previous degree I have a bit of knowledge about them. Over the next few days I will begin using both call and put options. No matter what the outcome is , it will be an experience!!!

[cathalkenny]

Conclusion of Buy and hold acoount

All of my 20 trades have been made on the buy and hold account . Overall it was an experience . Having no previous experience of trading on the stock market, I now feel a lot more equipped to start the proper game. I invested in many different markets and wide range of different industries

[cathalkenny]

Using technical analysis

Next I decided to do technical analysis. I studied various graphs and analysed support and resistance lines trends. This trend was evident among Emerson radio corp. There was sufficient evidence on this as we can see on the graph below. It had previously broken a resistance line a few days previous so I felt this upward curve would continue.

Another pattern I analysed was head and shoulders . I decided to investigate this trend with Oz minerals and smiths group plc. Below we can see a 6 month graph of this with Oz minerals.

The last but not least investment I made on my buy and hold account was investing in was smiths group plc. Below we can see the head and shoulder pattern. 

By analysing the graph we can see the shoulder at a height and now the price being on a head.

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Chancing my arm!!!

Having invested in a lot of companies due to their low P/E(ttm) I felt it was only right to invest in a company with an extremely high one. This company was BP plc. This figure stood at 313 which is considerably higher than the bench mark of 15.

I also felt that I wasn't taking a huge risk due to the steadiness of the price during 2013.

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Great Progression!!!

The next company I invested in was Bob Evan Farms . Bob Evans Farms, Inc. is a food service, processing, and retail company.

I analysed their performance over the past five years. The have a five year dividend growth of 15.18% . 

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Zurich Insurance group!!!

I decided to combine a few methodologies to decide on my next few decisions. One company I invested in here was Zurich Insurance Group.

Firstly they're P/E ratio stood at 10.7 which is under the bench mark of 15.They had a five year dividend growth of 2.53% . They also were falling daily on the stock exchange and I felt they were down as low as they should go .

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Another Risk!!

I decided then to take another risk in the market. I began to analyse companies that were on an upward curve for most of the year. One of these companies was techne corp.. Manufacturer of haematology controls and biotechnology products for research and diagnostics. I bought the shares at 80.74 in U.S market.

The graph above shows since April how the price was been increasing.