The Stock Market Game Teacher Instructions

1 THE STOCK MARKET GAME Teacher Instructions STANDARD 11.6A stock market game in which students invest in simulated stock. They will experience the thrill of speculation and the panic of a crash. OBJECT:Student involvement in an operating stock market in which they have an opportunity to make decisions which will cause them to succeed or fail. The game also stimulates interest in the ‘20's and what caused the panic and crash of 1929. TIME ALLOTMENT: Two class periods PROCEDURE: 1. Duplicate one copy of the two page stock prospectus for each student” page 3 and 4. Duplicate 40 copies of stock certificates, page 10c for every 30 students who will play the game. After duplication, cut each page into the

8 stock certificates. 2.Select four students as stock brokers. They will sell and buy stock from the players, as you post new prices. The brokers should be centrally located at a single table, and should be given all the stock certificates at the beginning of the game. Surplus money should also be given to the brokers. 3.The Game: Give each player the stock prospectus and issue each player $500 (4 one hundreds, 1 fifty and 5 tens). When each player has had a chance to read the stock prospectus, allow the players to buy stock from the brokers. The opening price is $10 a share for each stock. Each stock certificate represents 10 shares. So the opening cost is $100 per certificate. When every student has purchased stock, read and post the outcomes for 1920. The listing of new stock prices should be posed on the board or on a transparency. Do not erase the earlier postings. Brokers then should begin to buy and sell stock at the new prices. After approximately 10 minutes stop selling stock and close the market for new postings. After posting 1922, allow those students who wish to buy or sell to do so. When about 5 minutes has passed, read the special announcement about President Harding. Allow the market to remain open for 5 more minutes. Those who realize his death will cause a slump will have a chance to sell. Close the market and read the new postings. The game ends after you have posted the results for 1929 (the year of the crash). There are seven postings or stock prices. After the crash have the brokers buy back the stock and determine who has made the most money. 4.Posting price changes: Make a transparency of page 11 (Stock Record) and post new stock prices as they are given. If transparency material is not available draw the chart from page 11 on your blackboard. 2 CRITIQUE: 1. Begin by asking members of the class how much money they made. Ask the successful ones what system, if any, they used. “Buy low and sell high” might be an example. You may want to reward the top money winners with special privileges or with points. Discuss with the students the various stocks (most of them were actual companies), and what caused some to rise and fail. 2. Also discuss buying on the margin (amount of...

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