Stock Market Simulation And Worksheet Essays Examples

After completing the “Play a Virtual Market” simulation, my knowledge regarding how the stock market works was greatly enhanced. My basic strategy was to invest in oil, banks and energy stocks. I also picked a few stocks whose name I recognized. Fundamentally, my strategy was to buy low and sell high. I was estimating that the price of these stocks will go up because of the increase in oil prices, which then increases the energy prices.
I realize that Investing in the stock market is a risky investment. However, that riskiness can be decreased by investing in options. An option gives me, like the name suggests the option to sell my stock for a specific price at a certain date. By buying an option, I can sell my stock for the option. For instance, I buy a call option for $3 at a strike rate of $70. If the price of the stock increases above $70, then I’ll purchase the stock at the strike rate and sell it immediately for a profit. However, if the stock price goes lower than $70, then the option is worthless. However, I’ll only make a loss of $3. Buying a call option reduces the risk of investment as I clearly know the price I am going to buy the stock.
In conclusion, this stock market simulation has cleared a lot of confusion I had regarding how the stock market works. I also realize that investing in the stock market requires proper research and active monitoring of the stocks. Moreover, I learnt that investing requires a proper long-term strategy to succeed, and to actually beat the market to make a profit.