Best Practices For Stock Games

8 Minute Read

At HTMW, we work with a LOT of classroom stock games – over 14,200 class games just in 2018! Our support team work with hundreds of thousands of students per year, and our classroom outreach coordinators worth with tens of thousands of teachers to make sure their classes are a complete success.

That means we have a pretty good perspective on what works (and what doesn’t) when organizing your class stock game. If you’re using the best free stock game for the first time, or if you’re already a seasoned pro, here’s our tips for a successful, engaging class!

Start Early, End Late

We’ll start out with the hard one: Classes that have the most success start as early as they can in the semester, and end as late as possible.

This might seem counter-intuitive because it usually requires teachers to have students make their first trades in the stock game well before the class starts talking about investing, but believe us – it works!

Generally speaking, the longer the trading session, the better. This gives students more exposure to the financial markets – and they get more chances to see their portfolio react to market and financial news stories. This is where the real “learning” happens, and longer games maximize the “Teachable Moments”.

To help your class achieve success when starting early, we put together our “Getting Started” assignment – this is a series of 10 tasks that will introduce students to some of the basic concepts of the stock market, with articles, videos, and quizzes. We find many teachers create their stock game early, and have students go through this first Assignment as homework to save class time.

Then once your class does get to the Investing unit, your students will already be seasoned pros – and far more engaged in class discussion!

Rankings are a BIG DEAL

Class Rankings are the most engaging part of the stock game – and this is where HTMW really shines. We have real-time streaming rankings available both for your overall class, and just covering the current week.

This matters because the constantly-changing class rankings is what makes the stock game so engaging. Spend a few minutes each class period with a quick ranking update. Specifically, try to call out:

  • The top and bottom overall traders in the class – keys for discussion would be just what they think they did “right” or “wrong”
  • The top and bottom traders for the current week – keys for discussion are to have the students highlight what, specifically, happened in the markets which had a major impact on their portfolio

Use this as the launching point to tie the stock game back to your other class topics – this makes the rest of the lesson feel more “real”.

Teachers Trade Too!

This is the biggest sticking point that most teachers miss – teachers should be ACTIVELY trading in their portfolio alongside their students. It doesn’t need to be much – just place one or two trades per week.

Classes that have teachers trading alongside their students – and keep themselves in the class rankings – typically have 30% higher engagement than classes where the teacher sits on the sideline.

This happens for a few reasons:

  • Element of Competition – Students love to try to “Beat the Teacher”, and this adds a whole new element to the class rankings
  • Element of Conversation – If you placed a few trades in your own portfolio, you can start off the class discussion each week on what went well and what went poorly since the last class. Lead by example!
  • Element of Support – This one is just pure practicality – if you’re trading alongside your students, you’ll be better prepared to answer any questions they have on the stock game.

Allow Day Trading and Short Selling

This will be the most controversial piece of advice we’ll be offering: We recommend classes turn on both day trading and short selling, particularly for classes of high school students and older.

At first, this might be counter-intuitive – we generally don’t want to promote risky, short-term investing mindsets among students. We don’t really WANT students to be day traders. So why allow it?

At the end of the day, it is pure engagement. Letting students day trade and short sell means they have the entire world of investing opened up for them – they can react to any piece of market news as soon as it happens and see the impact of the economy on the financial markets (and visa versa) in real time. At the same time, it does reinforce the main idea behind the stock game – we want to remove the fear behind investing, and make it accessible to EVERY student. The more students feel they are in complete control over their portfolio, the better.

Think of it this way – if you allow both short selling and day trading, it should be exactly as difficult to LOSE money as it would be to MAKE money in the markets – students have the tools to research a company and use their best judgement, and see the consequences unfold in a real-world setting.

Use Assignments and Trade Notes

We touched on this briefly on the first point, but we believe it deserves to be repeated. Assignments and Trade Notes are features you’ll find only on stock games powered by StockTrak/HTMW – because we design everything in our games from the ground up for use in the classroom.

Trade Notes require students to provide a reason behind every trade – this is essential to hammer home the learning process. As one of your class contest rules, you can require students to provide a Trade Note for each order before the system will accept it. Teachers and students can both review their trade notes later. Learn More About Trade Notes.

Assignments are our other cornerstone – this lets you give your students a list of tasks to complete. This includes articles, videos, activities, and much more – and it covers more than just topics on investing. Assignments are a fantastic way to connect the stock game back to the other units you’re covering in class – and each one ends with a pop quiz that students need to pass in order to get credit. Learn More About Assignments.

Other Class Rule Considerations

Besides these best practices, there are a few other important “Pros” and “Cons” for other rules to consider when setting up your class.

Initial Cash

There are two camps when it comes to how much cash to give your students to start with. The “Big Spenders” ($100,000 +) and “Small Investors (<$25,000).

Big Spender Pros:

  • Makes math easy – percentages of $100,000 is pretty straightforward
  • Lots of room to try new strategies – students have a lot to play around with
  • Lets students “think big” and role play as a major investor

Big Spender Cons:

  • Not realistic for students – nobody is going to have $100,000 to invest right out of school. This can send the wrong message, that investing is “only for the rich”.
  • Getting started takes more time. That $100,000 can be overwhelming for some students – based on our analytics, large-cash classes usually see most students invest less than 10% of their total cash in the first week, only ramping up to being “fully invested” by the middle of the class period. This disengagement can be very counterproductive.

Small Investor Pros:

  • Easy for students to grasp – Starting with small amounts of cash (even amounts down to $1,000) make investing a lot more accessible to students; something they can definitely see themselves doing.
  • Makes math more challenging – This was the opposite case for the Big Spenders, but if you’re using the stock game in a Math class, making the fractions a bit more challenging is all part of the fun. If students only have $5,000 to invest, it can be harder to fit in some bigger-cost stocks into a diversification model.
  • Students Tend To Remember More – Based on what we’ve heard from teachers, starting the class with less cash is more memorable for students, because it becomes a more “tangible” experience.

Small Investor Cons:

  • Very Little “Wiggle Room” – if students have very little cash to start with, it becomes challenging to properly allocate a portfolio. If a share of a popular stock is $1,700 but students only have $5,000, they might have that option cut off entirely if they want a diversified portfolio

Diversification Rules

On HTMW, you can set two types of diversification rules:

  • Position Limit – how much students can invest in any single stock (AAPL, AMZN, ect)
  • Diversification Limit – how much students can invest in a security type (all stocks, all mutual funds)

Most teachers put in place a position limit to force students to diversify their portfolios. However, we have heard that letting students put “all their eggs in one basket” is a great opportunity to find “teachable moments” when those students take a major hit.

…But at the same time, if those students get “lucky”, it can send the wrong message to the rest of the class.

Lastly – Be Creative!

If you have used a stock game before, don’t be afraid to try new “game modes”! We have some schools that use HTMW purely as a homework assignment, others entirely in-class. Some teachers even set up 2 separate games, where students compare an “Active” vs “Passive” investing strategy. There are tons of ways to use the game – so get out there and start!

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