Professor:

At STOCK-TRAK our mission is to help you teach your students about the financial markets. Whether you are training your students to be billion dollar portfolio managers, or training them to manage their own personal finances, our service will give your students some real-world experience trading stocks, options, futures, bonds, mutual funds, and more. We have designed STOCK-TRAK to provide your students with the most comprehensive portfolio simulation available AND at a reasonable price. To make sure your students get the maximum benefit from STOCK-TRAK, it is essential that you, as the professor, understand how we operate. The purpose of this Professor's Guide is to answer any questions that you may have, thereby insuring that your students get the maximum benefit from our service. As always, I welcome your comments and questions. Please feel free to call me on my direct phone line at 678-475-0766.

Sincerely,

Mark T. Brookshire, President

Commonly Asked Questions

• How many schools use STOCK-TRAK?
  Each year STOCK-TRAK works with over 800 professors from around the world and their 45,000+ students. Our customers include colleges, universities, community colleges, private schools, and finance and investment clubs located in all 50 states and over 25 countries around the globe. Schools using STOCK-TRAK in the past have included Harvard, Northwestern, Penn, Harvard, Notre Dame, Dartmouth, Cornell, and University of Chicago just to name a few. In fact, in 2005 84% of the top business schools in the U.S. used Stock-Trak (based on Forbes ranking).
  
  
• What exactly is STOCK-TRAK?
  STOCK-TRAK is set up as a discount stock brokerage office that deals in simulated trading. When your students register, they receive a brokerage account with an imaginary cash balance. Once their accounts are activated, they can visit our web page to make stock, option and futures trades or call into our office using a toll-free phone number if they have questions about their account The STOCK-TRAK brokers do NOT give advice. To get a better idea, click on the "Make a Trade" link at the top of this page and proceed to trade using a demo account of A00004 with password "1234".
  
  
• What Securities Can Students Trade?
  We trade any common or preferred stock listed on the NYSE, AMEX or NASDAQ that is over $3.00 per share. STOCK-TRAK also trades all stock and index options, all mutual funds and the most popular corporate bonds, treasury bonds, index options, and commodity, index, and foreign currency futures. We have also added the major Canadian, European, Asian, and Latin American markets around the world. To see exactly what markets we trade, use the demo account above and click on the "Make a Trade" link.
  
• What Are The Trading Hours?
  Studends can place trades 24/7. If they place a trade when the market is open they will get a slightly delayed price (Real-time prices are available for some markets). If they place a trade when the markets are closed then their order will be filled at the next market open. Mutual fund and bond trades are made at end of day prices.
  
• What Is The Cost?
  The cost for STOCK-TRAK ranges from $19.95 to $24.95 depending on the length of the trading period. The Standard Service allows for a 10 week trading period, a maximum of 100 trades and the students receive bi-weekly statements. Our Silver Service givet the students 200 trades and a 12 week trading period. Our Gold Service gives the students up to a 16 week trading period, 200 trades, and weekly statements. Additionally, students can have a second account for only $5.00. A lot of professors want the students to have one Actively managed account and a second Passive Strategy account. When you click on the "Professor Register Class" link at the top left of our webpage, you will see all of the pricing options explained in detail.
  
• How Long Does The Trading Period Last?
  The length of the trading period is up to you. We recommend that the trading period begin one or two weeks after your classes have started, and that it at least one week before your class ends. This will give your students some time to write a summary of their portfolio strategy /return.
  
• When Does The Trading Period Begin?
  The trading period begins and ends at your discretion. When you sign your class up for STOCK-TRAK, you will fill out a STOCK-TRAK Sign-up Sheet that will ask you when to begin and end the trading period, as well as other relevant information.
  
  
• Are Any Commissions Charged On The Students' Transactions?
  Yes. We want STOCK-TRAK to be as much like the real world as possible. Trades made on the web page offer a discounted commission of a flat rate of $25. Trades made via the phone carry a commission of $50.00 plus $5.00 per lot (futures contract, bond, options contract, etc.). We trade all mutual funds as no-load funds.
  
• What is the initial cash balance for the students?
  You have the flexibility to choose whatever size portfolio you want. We recommend $100,000 for undergraduates and $500,000 for graduate students.
  
• Do the students receive any update on their progress?
  Yes, they receive 2 types of updates. A Professor Summary will be sent to you every week which ranks the students according to total portfolio value so their progress can be tracked vis-a-vis the rest of the class. This Summary also shows each account's cash position, market value long, market value short and the number of trades made. The Professor Summary can be distributed to you via regular mail, fax, or email.

  Individual student statements will also be sent to you every two weeks (weekly if you select that option). The statements list transactions made, loan balances, interest earned, S&P 500 return over the same trading period, and the market value of the student's open positions. Statements are distributed to you via your choice of email, fax, or regular mail.

• Do The Professors Ever Participate?
  We actively encourage professors to personally participate in STOCK-TRAK. As an incentive, you will be given one free account when you register your class. The free account has been used by different professors in a variety of ways. Often one account will be used for a passive portfolio (such as a dartboard account) while the other is actively managed. You can use the accounts as a measuring stick for your students or as a means to try out a new strategy.
  
• Does STOCK-TRAK Account For Dividends & Splits?
  Yes. Each day we receive an updated list of stocks that have split or paid a dividend. All splits are adjusted accordingly and dividends greater than 10 cents are invested in the student's money market account.
  
• How Do I Prevent My Students From Taking Very Risky Positions?
  Give the students a disincentive for losing money or underperforming the S&P500. For example, some professors tell their class that the top 3 performing students will get 5 extra credit points on their final exam grade, and the 3 worst students will get 5 points taken off their final exam grade (the professors then give the bonus points but do NOT take off points from the poor performers--just the threat is enough to make the students stay more conservative).

  Also, remember that you have a good deal of flexibility when it comes to specifying the simulation you want for your class. You can limit the number of transactions, size of trades or type of security. We will work with you to make sure that your students get the most out of STOCK-TRAK.

  To force students to diversify their portfolios, and to make the students trade as if it was real money, students will not be able to put "all their eggs in one basket." Stock, option, and future positions will be limited to 1/2 of their initial cash balance. Accounts that begin with $100,000 will only be allowed to spend $50,000 on any given stock. (Without this position limit, we have seen some students buying on margin and spending $200,000 on one stock; Now they can only spend 1/4 of that an any stock, option, or future.)

• Can Students Test Active vs. Passive Investment Strategies?
  Many professors have requested that students be given a second account for a nominal fee so that students can have one buy-and-hold account, and another actively managed account. You, the professor, must request this account when you fill out the Sign-Up Sheet. This buy-and-hold account will be limited to 20 trades, professor summarys will be sent, but students will have to print their individual statements from the web page. This second account costs an additional $3.00.
  
• How Can STOCK-TRAK Be Incorporated Into My Class?
  Professors are finding that STOCK-TRAK can play an integral role in the success of their class. STOCK-TRAK allows you to blend classroom theory with real world experience, tailored to the level of your students. STOCK-TRAK is most effective when it is used to complement your lectures.

  For example, many professors of introductory investments and finance courses have the students make trades in each security discussed in class (in order to avoid confusing the students, many professors also limit the securities traded to those covered in class). Students of an introductory class might be given an assignment like this:

  • in the first 2 weeks of class have your students develop an asset allocation plan and invest some of their money in blue chip stocks or conservative mutual funds,
  • encourage some investments to be bought all at once and others to be bought into over several weeks (this will teach them dollar costs averaging),
  • encourage your students to sell short stocks and buy on margin as you cover these topics,
  • as you discuss diversification in class, have your students adjust their portfolio accordingly across industry sectors or company size,
  • as you discuss bonds, have your students invest in some corporate or treasury bonds according to the asset allocation model they developed early in the semester,
  • as you discuss hedging, have your students hedge the whole account (using index options or futures) and hedge specific positions (using stock options),
  • and as you cover options and futures, encourage your students to take some percentage of their account and speculate in buying calls and puts, writing naked and covered options, and betting on interest rates, commodity prices, or currencies,
  • and finally, at the end of the semester, ask your students to write a short report about the portfolio performance, including a sentence or two about why they made each trade, what worked, what didn't work, and why.

  
  One professor distributes a new scenario every two weeks and then grades the students on how they adjust their portfolio. Past scenarios have included dropping interest rates, high inflation, war breaking out in the Persian Gulf, or large gains in the leading indicators.

  The infamous dart board has historically been a very effective tool for demonstrating portfolio theory and it can easily be combined with the STOCK-TRAK experience. Professors who have used this approach typically paste a list of securities on the wall (the dart board) and then throw darts to select a portfolio. Using one of the two free accounts each professor receives, the dart board account can be tracked throughout the trading period. Students can compare their results to the "random" portfolio and see the principles of portfolio theory in action. As an incentive for the student to take an active interest in his or her portfolio, points can be given on the final for doing better than the dart board account or the S&P 500. Some professors even take a few points away for doing worse than the S&P.

  The important thing to remember, however, is that the emphasis should be on education and not portfolio return. STOCK-TRAK is a tool for exposing students to the stock market. You want the students to care about what they are doing, but don't make them so concerned about the return on their portfolios that they miss out on the educational experience.

• How Do I Register My Class?
  Registration is easy. You simply fill out a STOCK-TRAK Sign-Up Sheet. The form asks for the number of registration packets needed, trading period dates, portfolio size, your phone number, etc.

  Once we receive the Sign-Up Sheet, we will email or FedEx your registration materials to you. On the first day of class you can pass out the materials to your students which containstheir individual account number, the STOCK-TRAK trading rules and guidelines, helpful hints, a list of futures and bonds that we trade.

  Our Pledge Is To Make Sure Your Students Receive The Best Educational Supplement Available....Let Us Know If We Can Help STOCK-TRAK Work Better For You And Your Class!