Stock Market Trading

[DaveC]

My solo campaign has got to a stage where I'm thinking of introducing shares and investments in corporations. This got me thinking, after I read the JTAS article on the stock market. It's got some good ideas, but,(and I have to admit I know bugger all about economics) doesn't the modern stock market system rely on near instantaneous exchange of information? If I buy a block of 10,000 shares of Tukera stock, I'll have to wait two weeks minimum before I found out what effect that had on the Regina market. I don't see how it would work effectively.
My idea was that PC's would invest in something like 'A Company of the East' and only learn months or years later whether their investment had paid off. But this doesn't seem to work with established corporations either. Any ideas, anyone?

 

[Ranger]

Stock exchanges have been around for a long time before modern/instantaneous communications. You probably want to look at how pre-telegraph stock exchanges worked. This would probably open up a whole new line of adventure hooks. As I recall, the original Count of Monte Cristo(sp?) novel had one of the count's revenge plans revolve around creating a fictitious gold mine stock and getting one of his targets to sink all his money into the company stock, then revealing the fraud and wiping out the mark's fortune. The scheme worked because the alleged gold mine was in South America while the stock was traded in Paris.

Just my thoughts,

Rob

 

[Elliot]

The Imperium is great for futures trading - i.e. Will the price of Onnesium on the Regina Stock Exchange go up or down when the next shipment from the Far Frontiers sector arrives.

 

[DaveC]

Originally posted by Elliot:
The Imperium is great for futures trading - i.e. Will the price of Onnesium on the Regina Stock Exchange go up or down when the next shipment from the Far Frontiers sector arrives.

Can you expand on that a bit? (as I said, I know nowt about economics and how the SE works.)

 

[Ranger]

Originally posted by Brass-Jester:
</font><blockquote>quote:</font><hr />Originally posted by Elliot:
The Imperium is great for futures trading - i.e. Will the price of Onnesium on the Regina Stock Exchange go up or down when the next shipment from the Far Frontiers sector arrives.

Can you expand on that a bit? (as I said, I know nowt about economics and how the SE works.) </font>[/QUOTE]Ok, I'm not a professional at this stuff, so those of you that are, please correct me.

There are three basic things that are traded: Stocks, Bonds, and Futures Contracts. Each has it's own dynamics based on the nature of the 'instrument'.

Stocks: This is a share of ownership in a company. The price is determined by what how well the company will due in the future. If people think the company will grow, price goes up, if they think the company is in trouble, the price goes down. There is no specific guaranty of return.

Bonds: This is a contractual loan to a company. The person buying the bond is basically loaning the company the money with a guaranty that they will get the money back at a certain time, and get specific interest payments periodically until the principle is repaid. Bonds can be traded between people once they are issued just like stocks. If you buy a bond, you calculate the value as a function of the price and the yield (they have entire courses in this at business school).

Futures Contracts: This is the really exiting stuff. Your buying a contract for a quantity of a commodity that will be available some time in the future. Your betting that the commodity will be worth more when the contract comes due than when you buy it. If the commodity is worth less than what you paid for it when the contract comes due, then you eat the difference. (this is basically like the speculative trade rules in Traveller).

There are lots of other things out there, like derivatives, that really take a professional to explain.

Hope that helps

Rob

 

[Elliot]

The Ranger said it better and simpler than I could - as I said - Traveller is a futures market!

 

[aravain]

Ah ,but you forgot all about "puts"; the chance that you believe that something will go down in price. With a little inside information (or help), I must agree completely that futures are the way to go. Who knows if that critical merchant run gets through or perhaps you have been stockpiling a critical shipment waiting to drive a company's stock (or commodity) down. I've been in a couple campaigns where the strategic use of futures, commodities, and er.."intervention" by myself (and friends) have destroyed or greatly altered the campaign. At the least, I've always been able to squeeze a gain out of a market before the GM "catches on". Er,......"shar_leigh" don't read this thread, I've got some real neat plans about to come together!

 

[Ranger]

Originally posted by Aravain:
Ah ,but you forgot all about "puts"; the chance that you believe that something will go down in price. With a little inside information (or help), I must agree completely that futures are the way to go. Who knows if that critical merchant run gets through or perhaps you have been stockpiling a critical shipment waiting to drive a company's stock (or commodity) down. I've been in a couple campaigns where the strategic use of futures, commodities, and er.."intervention" by myself (and friends) have destroyed or greatly altered the campaign.

True, I didn't mention 'puts', but to be honest, I'm not that up on futures trading. Short selling is another potential adventure hook as well. A patron hires the group to do something that will drop the price of a stock so they can cover their shorting of the same stock. There are a lot of adventure seeds here.

Just my thoughts,

Rob

 

[campbell]

http://www.users.zetnet.co.uk/trisen/sol/traveller/fm.html

this links to a fairly in depth look for mt. you could also try getting a copy of star trek rpg traders rules (cant remember the exact title) but that had a stock market system in it .