DMG
28-08-2007, 16:31
http://i23.photobucket.com/albums/b360/DMG2005/SecuritiesExchangeMarket.jpg
Overview
The Securities Exchange Market is a speculative stock market based in the Dominion. The idea of a speculative stock market is something that has been part of the nation's culture for many years because there are extremely few (capable of being counted on one hand and even one finger at times) companies that are traded publicly; and further, those that are, like DMI, have for all intents and purposes a zero average daily volume, which means that nobody is trading their shares and thus a stock market is unnecessary. Corporations are paid one million dollars to be listed on the exchange, which turns out to be a very good deal for them because it requires nothing on their behalf, nets them an easy buck, and increasing their notability with (mostly) the upper class of the country.
[Note: Even though DMI is a publicly traded company, shares bought here are still speculative shares and hold no true monetary or ownership value.]
Definition
A speculative stock market works the same way as a regular one (regulations, earnings reports, analysts, trades, etc.) found in nations round the world with one major difference; it is not real money and not real shares that are being sold. So what is the point, you ask? Well, in fact, you can actually make and lose money. The Securities Exchange Market is a corporation that has created this listing, and as a profitable enterprise, SEM wishes to make a profit off of it.
For a fee of half a billion dollars [$500,000,000], you can purchase an account with SEM. This account enables the user to buy and sell [read: trade] in the Securities Exchange Market free of transacation fees. However, instead of using real money, each account is initially granted one hundred billion credits [C100,000,000,000], the monetary trading value equivalent to the standard dollar in the market. With those credits, one can buy any number of shares in any of the companies listed on the exchange just as if it were real (except no ownership is actually trading hands). So, how does one make a profit as mentioned before? Well, almost like a game, if the user is able to increase their account's total credit value through increases in stock value, they will receive money. In the opposite direction though, if they lose certain percentages of their initial credit, they must pay a fee. The levels are as follows:
---------------------------
Payouts (Profits)
+50% = $200 million
+100% = $400 million
+150% = $500 million
+200% = $800 million
+400% = $2 billion
+1000% = $10 billion
---------------------------
Fees (Losses)
-30% = $100 million
-40% = $100 million
-50% = $200 million
-75% = $200 million
-90% = $400 million
-100% = $500 million
---------------------------
However, there is a difference in how profits and losses work. For profits, you must sell the stock you own equivalent to the level you are at to receive the cash. When this occurs, you will return to having one hundred billion credits [C100,000,000,000] and you may continue as if you had just started. This means that you are playing a game of risk when your stocks are going up, guessing that you will be able to reach from +150% range to the +200% range without cataclysmically falling. With losses, however, you must pay the fee for each ascending loss you reach. This means that once your total stock and credit value hits 70% of its original (-30%: meaning you have a total net worth of seven hundred million credits), you must pay a one hundred million dollar fee. If you then continue to descend to 60% of its original (-40%: meaning you have a total net worth of six hundred million credits), you must pay another fee of one hundred million dollars. The one exception to this rule is that your total net worth must have advanced twenty five percentage points above a fall line (the loss marks) in order to qualify to repay that fee. For example, if you are down to 68% of original, you have to pay the -30% fee; if you then go up to 74% one day, and then down to 64% the next day, you would not have to repay the fee (to have to repay that particular fee, you would have to rebound to 95% of original or higher at some point and then drop below 70% again).
Let us take a basic case study to clarify these confusing terms better.
1) John H. signs up for an account by paying SEM five hundred million dollars [$500,000,000].
2) With the one hundred billion credits [C100,000,000,000] he receives, he invest ninety billion [C90,000,000,000] and keeps ten billion [C10,000,000,000] for future investments.
3) His total investments plus saved credits (ten billion) increases to one hundred fifty seven billion credits [C157,000,000,000] when his stock goes up. Having crossed the +50% line, he has qualified to receive one hundred million dollars [$100,000,000] from SEM if he sells everything and begins again with one hundred billion credits [C100,000,000,000] and no stock. However, feeling that he can increase his investment more, he decides not to sell and thus does not receive the payout.
4) Unfortunately for John, his investments plummet to a total (including ten billion saved credits) of sixty seven billion credits [C67,000,000,000]. Having crossed the -30% line, he has to pay a fee of one hundred million dollars to SEM [$100,000,000]. He continues, hoping to make up his lost gain.
5) Once again though, his investments drop to forty seven billion credits [C57,000,000,000]. Having crossed both the -40% line and -50% line, he has to pay another one hundred million dollar fee [$100,000,000] plus a two hundred million dollar fee [$200,000,000].
6) Continuing forward, John's investments rise to eighty seven billion credits [C87,000,000,000] or 87% of the original. No fees or bonuses are incurred.
7) John's investments once again drop, this time to fifty ninety billion credits [C59,000,000,000]. Though he has crossed the -30% of initial amount line again, he does not have to pay the fee because he never rose twenty-five percent [25%] above the line. However, he has also crossed the -40% line, and he had advanced twenty-five percent [25%] past that when he reached 87% (or -13%), and thus has to pay the fee of one hundred million dollars [$100,000,000].
8) The next day comes and John's investments sky rocket to four hundred sixty billion credits [C360,000,000,000] or +360% from its initial value. Wanting no more of the ups and downs of the stock market, John sells out, liquidating all of his stock and receiving the eight hundred million dollar payout [$800,000,000].
9) John's stocks are all gone, but he has another one hundred billion credits [C100,000,000,000] to play with. However, he decides not to, leaving his account stagnant in case he returns for another time.
10) In total, Jack paid an initial fee of five hundred million dollars [$500,000,000] for the account plus another five hundred million dollars [$500,000,000] in "losses fees". However, he received a payout of eight hundred million dollars [$800,000,000] for his end profits, meaning he only lost two hundred million dollars [$200,000,000] in the end.
We hope this case study helped illustrate how the system works. However, we would like to add that these changes do not reflect real changes in the market. With a prospering economy in the Dominion, losses are more rare than gains.
Frequently Asked Questions
So I can own a piece of World Corp., DMI, and Digital Enterprises?
As explained numerous times above, no. World Corp. and Digital Enterprises are privately owned companies and DMI is publicly traded but only through DMI and investors rarely sell. These credits and shares of stock are entirely fake. This is essentially a game based on real life occurrences (such as lay-offs, buyouts, takeovers, earnings reports, investments, analyst projections, etc.).
What happens if I reached zero credits [C0] in my account?
In this case, besides having to pay two billion dollars [$2,000,000,000] in total fees and being a notoriously bad investor, your account would be dead. You would have nothing left to invest. To receive another one hundred billion credits [C100,000,000,000], you would have to pay another five hundred million dollars [$500,000,000] to SEM.
This is pocket cash to me, can I have a larger account?
In fact, you can. Backed by a domestic bank, we can offer high-end clients accounts worth up to ten times [10x] the standard amount. This means that all fees (including the activation fee of five hundred million dollars) and payouts will be increased by ten times. However, this does not mean you will be receiving any more credits; you will still only have one hundred billion credits [C100,000,000,000] to invest with.
How often do stock prices change and how do I know why?
Relevant news and reports on the companies will be posted on the SEM main forum for public reading and discussion. Earnings reports are scheduled months in advance and come out quarterly; however, analysts’ projections and predictions may come at any time if you wish to listen to them. Stock prices will generally change once a day based on speculation (the name of the game); however, if a stock becomes a hot commodity on SEM, it is liable to increase multiple times in a day as any real stock would.
Can I buy from another investor?
Yes, while initially all stock is held by a "bank," you can trade with other investors (any combination of stocks and credits going either way). You may do so whether or not the shares of stock have been sold out and the bank no longer has any left. However, conspiring to sell at drastically below market levels and cheat the market in anyway will result in warnings, suspensions, fees, or deletion.
Wait, how do I buy shares of stock that are listed in dollars [$], when I only have credits [C]?
For the purposes of the Exchange, one dollar equals one credit [$1 = C1]. That does not mean, however, that fees or buyouts can be paid in credits. Real world dollars will be rewarded or paid for as such.
Can I have more than one account?
No. Any individual or entity is limited to one account.
What To Do?
Fill out a form, pay the activation fee, and get started investing!
Form:
Nation: [Your Nation]
Investor: [Name of Account User]
ID Code: [Leave Blank - to be issued]
Credits: C100,000,000,000
Fee Incurred: $500,000,000
Payouts: $0.00
Stocks: [Leave Blank]
To trade securities - buy or sell stocks - you must submit the following form:
ID Code: [Issued by SEM]
Transaction: [Buy or Sell]
Stock Name:
Stock Symbol:
Shares: [Number being traded]
Book Value: [Current value of stock per share]
Total Value: [Number of shares times book value]
Change: [Fill out only if selling with net gain or loss in credits.]
[OOC: All right, I hope I have explained it adequately, but as usual, probably not - so ask questions and get clarifications. Basically, this is what I have dubbed a "speculative stock market." It runs exactly the same way as a real stock market (except for live changes in stock value for obvious reasons), except that the money and stock are fake. Instead, it is like a game with fees and payments for losses and gains with your investments. Knowing how the real stock market and everything associated with it will help a bit (including diversification and cyclical stocks for long run gains, high risk stock is just that, etc.), but also remember that things run the way I say they do (the NationStates way) and not realistically. I will post news events about the companies, analysts' statements, and basic earnings reports every so often; but I may also include stuff like cynical speculation because a financier fails or the housing market is cooling off. Also, the more you know about my nation in general, the better off you may tend to be. Finally, you will notice that I have not posted much information about these companies - some can be found elsewhere, but mostly not - thus I will be allowing you to ICly ask questions or hire analysts to gain more information. However, don't just say, "I need information on all of the companies. Go." I will not respond to that. Be more specific and limited with your questions (though they could be anything from what the company's market is to who is the CEO to do the employees receive low salaries). So, ask OOC questions for clarification, IC questions for clarification and information, and have fun with this. While you can buy stocks when you activate your account, I probably wont make any updates or price changes until I get an acceptable number of people involved. ICly it will begin at the beginning of this fiscal year.
Please RP. Don't just say, "I'm buying this stock," and post a transaction form. Give a little writing (be it talking, thoughts, actions, surroundings, whatever) - just write some.
This is the real final note. I will probably be adding (and perhaps removing?) companies to the Exchange in the future. However, I have not made a decision about foreign companies (i.e. your companies). I think I may perhaps allow it if they are reasonable and you either promise to give similar updates and price updates as I am or allow me to do so (I promise I will be reasonable). Remember though, while people aren't actually buying stock in your company, those updates (such as yearly losses or the like) are real and will affect your company.]
Overview
The Securities Exchange Market is a speculative stock market based in the Dominion. The idea of a speculative stock market is something that has been part of the nation's culture for many years because there are extremely few (capable of being counted on one hand and even one finger at times) companies that are traded publicly; and further, those that are, like DMI, have for all intents and purposes a zero average daily volume, which means that nobody is trading their shares and thus a stock market is unnecessary. Corporations are paid one million dollars to be listed on the exchange, which turns out to be a very good deal for them because it requires nothing on their behalf, nets them an easy buck, and increasing their notability with (mostly) the upper class of the country.
[Note: Even though DMI is a publicly traded company, shares bought here are still speculative shares and hold no true monetary or ownership value.]
Definition
A speculative stock market works the same way as a regular one (regulations, earnings reports, analysts, trades, etc.) found in nations round the world with one major difference; it is not real money and not real shares that are being sold. So what is the point, you ask? Well, in fact, you can actually make and lose money. The Securities Exchange Market is a corporation that has created this listing, and as a profitable enterprise, SEM wishes to make a profit off of it.
For a fee of half a billion dollars [$500,000,000], you can purchase an account with SEM. This account enables the user to buy and sell [read: trade] in the Securities Exchange Market free of transacation fees. However, instead of using real money, each account is initially granted one hundred billion credits [C100,000,000,000], the monetary trading value equivalent to the standard dollar in the market. With those credits, one can buy any number of shares in any of the companies listed on the exchange just as if it were real (except no ownership is actually trading hands). So, how does one make a profit as mentioned before? Well, almost like a game, if the user is able to increase their account's total credit value through increases in stock value, they will receive money. In the opposite direction though, if they lose certain percentages of their initial credit, they must pay a fee. The levels are as follows:
---------------------------
Payouts (Profits)
+50% = $200 million
+100% = $400 million
+150% = $500 million
+200% = $800 million
+400% = $2 billion
+1000% = $10 billion
---------------------------
Fees (Losses)
-30% = $100 million
-40% = $100 million
-50% = $200 million
-75% = $200 million
-90% = $400 million
-100% = $500 million
---------------------------
However, there is a difference in how profits and losses work. For profits, you must sell the stock you own equivalent to the level you are at to receive the cash. When this occurs, you will return to having one hundred billion credits [C100,000,000,000] and you may continue as if you had just started. This means that you are playing a game of risk when your stocks are going up, guessing that you will be able to reach from +150% range to the +200% range without cataclysmically falling. With losses, however, you must pay the fee for each ascending loss you reach. This means that once your total stock and credit value hits 70% of its original (-30%: meaning you have a total net worth of seven hundred million credits), you must pay a one hundred million dollar fee. If you then continue to descend to 60% of its original (-40%: meaning you have a total net worth of six hundred million credits), you must pay another fee of one hundred million dollars. The one exception to this rule is that your total net worth must have advanced twenty five percentage points above a fall line (the loss marks) in order to qualify to repay that fee. For example, if you are down to 68% of original, you have to pay the -30% fee; if you then go up to 74% one day, and then down to 64% the next day, you would not have to repay the fee (to have to repay that particular fee, you would have to rebound to 95% of original or higher at some point and then drop below 70% again).
Let us take a basic case study to clarify these confusing terms better.
1) John H. signs up for an account by paying SEM five hundred million dollars [$500,000,000].
2) With the one hundred billion credits [C100,000,000,000] he receives, he invest ninety billion [C90,000,000,000] and keeps ten billion [C10,000,000,000] for future investments.
3) His total investments plus saved credits (ten billion) increases to one hundred fifty seven billion credits [C157,000,000,000] when his stock goes up. Having crossed the +50% line, he has qualified to receive one hundred million dollars [$100,000,000] from SEM if he sells everything and begins again with one hundred billion credits [C100,000,000,000] and no stock. However, feeling that he can increase his investment more, he decides not to sell and thus does not receive the payout.
4) Unfortunately for John, his investments plummet to a total (including ten billion saved credits) of sixty seven billion credits [C67,000,000,000]. Having crossed the -30% line, he has to pay a fee of one hundred million dollars to SEM [$100,000,000]. He continues, hoping to make up his lost gain.
5) Once again though, his investments drop to forty seven billion credits [C57,000,000,000]. Having crossed both the -40% line and -50% line, he has to pay another one hundred million dollar fee [$100,000,000] plus a two hundred million dollar fee [$200,000,000].
6) Continuing forward, John's investments rise to eighty seven billion credits [C87,000,000,000] or 87% of the original. No fees or bonuses are incurred.
7) John's investments once again drop, this time to fifty ninety billion credits [C59,000,000,000]. Though he has crossed the -30% of initial amount line again, he does not have to pay the fee because he never rose twenty-five percent [25%] above the line. However, he has also crossed the -40% line, and he had advanced twenty-five percent [25%] past that when he reached 87% (or -13%), and thus has to pay the fee of one hundred million dollars [$100,000,000].
8) The next day comes and John's investments sky rocket to four hundred sixty billion credits [C360,000,000,000] or +360% from its initial value. Wanting no more of the ups and downs of the stock market, John sells out, liquidating all of his stock and receiving the eight hundred million dollar payout [$800,000,000].
9) John's stocks are all gone, but he has another one hundred billion credits [C100,000,000,000] to play with. However, he decides not to, leaving his account stagnant in case he returns for another time.
10) In total, Jack paid an initial fee of five hundred million dollars [$500,000,000] for the account plus another five hundred million dollars [$500,000,000] in "losses fees". However, he received a payout of eight hundred million dollars [$800,000,000] for his end profits, meaning he only lost two hundred million dollars [$200,000,000] in the end.
We hope this case study helped illustrate how the system works. However, we would like to add that these changes do not reflect real changes in the market. With a prospering economy in the Dominion, losses are more rare than gains.
Frequently Asked Questions
So I can own a piece of World Corp., DMI, and Digital Enterprises?
As explained numerous times above, no. World Corp. and Digital Enterprises are privately owned companies and DMI is publicly traded but only through DMI and investors rarely sell. These credits and shares of stock are entirely fake. This is essentially a game based on real life occurrences (such as lay-offs, buyouts, takeovers, earnings reports, investments, analyst projections, etc.).
What happens if I reached zero credits [C0] in my account?
In this case, besides having to pay two billion dollars [$2,000,000,000] in total fees and being a notoriously bad investor, your account would be dead. You would have nothing left to invest. To receive another one hundred billion credits [C100,000,000,000], you would have to pay another five hundred million dollars [$500,000,000] to SEM.
This is pocket cash to me, can I have a larger account?
In fact, you can. Backed by a domestic bank, we can offer high-end clients accounts worth up to ten times [10x] the standard amount. This means that all fees (including the activation fee of five hundred million dollars) and payouts will be increased by ten times. However, this does not mean you will be receiving any more credits; you will still only have one hundred billion credits [C100,000,000,000] to invest with.
How often do stock prices change and how do I know why?
Relevant news and reports on the companies will be posted on the SEM main forum for public reading and discussion. Earnings reports are scheduled months in advance and come out quarterly; however, analysts’ projections and predictions may come at any time if you wish to listen to them. Stock prices will generally change once a day based on speculation (the name of the game); however, if a stock becomes a hot commodity on SEM, it is liable to increase multiple times in a day as any real stock would.
Can I buy from another investor?
Yes, while initially all stock is held by a "bank," you can trade with other investors (any combination of stocks and credits going either way). You may do so whether or not the shares of stock have been sold out and the bank no longer has any left. However, conspiring to sell at drastically below market levels and cheat the market in anyway will result in warnings, suspensions, fees, or deletion.
Wait, how do I buy shares of stock that are listed in dollars [$], when I only have credits [C]?
For the purposes of the Exchange, one dollar equals one credit [$1 = C1]. That does not mean, however, that fees or buyouts can be paid in credits. Real world dollars will be rewarded or paid for as such.
Can I have more than one account?
No. Any individual or entity is limited to one account.
What To Do?
Fill out a form, pay the activation fee, and get started investing!
Form:
Nation: [Your Nation]
Investor: [Name of Account User]
ID Code: [Leave Blank - to be issued]
Credits: C100,000,000,000
Fee Incurred: $500,000,000
Payouts: $0.00
Stocks: [Leave Blank]
To trade securities - buy or sell stocks - you must submit the following form:
ID Code: [Issued by SEM]
Transaction: [Buy or Sell]
Stock Name:
Stock Symbol:
Shares: [Number being traded]
Book Value: [Current value of stock per share]
Total Value: [Number of shares times book value]
Change: [Fill out only if selling with net gain or loss in credits.]
[OOC: All right, I hope I have explained it adequately, but as usual, probably not - so ask questions and get clarifications. Basically, this is what I have dubbed a "speculative stock market." It runs exactly the same way as a real stock market (except for live changes in stock value for obvious reasons), except that the money and stock are fake. Instead, it is like a game with fees and payments for losses and gains with your investments. Knowing how the real stock market and everything associated with it will help a bit (including diversification and cyclical stocks for long run gains, high risk stock is just that, etc.), but also remember that things run the way I say they do (the NationStates way) and not realistically. I will post news events about the companies, analysts' statements, and basic earnings reports every so often; but I may also include stuff like cynical speculation because a financier fails or the housing market is cooling off. Also, the more you know about my nation in general, the better off you may tend to be. Finally, you will notice that I have not posted much information about these companies - some can be found elsewhere, but mostly not - thus I will be allowing you to ICly ask questions or hire analysts to gain more information. However, don't just say, "I need information on all of the companies. Go." I will not respond to that. Be more specific and limited with your questions (though they could be anything from what the company's market is to who is the CEO to do the employees receive low salaries). So, ask OOC questions for clarification, IC questions for clarification and information, and have fun with this. While you can buy stocks when you activate your account, I probably wont make any updates or price changes until I get an acceptable number of people involved. ICly it will begin at the beginning of this fiscal year.
Please RP. Don't just say, "I'm buying this stock," and post a transaction form. Give a little writing (be it talking, thoughts, actions, surroundings, whatever) - just write some.
This is the real final note. I will probably be adding (and perhaps removing?) companies to the Exchange in the future. However, I have not made a decision about foreign companies (i.e. your companies). I think I may perhaps allow it if they are reasonable and you either promise to give similar updates and price updates as I am or allow me to do so (I promise I will be reasonable). Remember though, while people aren't actually buying stock in your company, those updates (such as yearly losses or the like) are real and will affect your company.]