A bull market for learning
CHAMPAIGN - Trading action started slowly in Joyce Rusk's consumer education class, but her Centennial High School students caught on quickly, and the market heated up fast.
?I'm putting a hold on the market,? said University of Illinois finance teacher Elisabeth Oltheten, who brought her students and finance club members to Centennial to help the high school students master the learning curve.
The UI students - Kristen Carvell, Melissa Greco, Luke Goodwin, Hector Becerra and Paul Kozyra - had handed out ?buy? and ?sell? orders to the 23 students in Rusk's class so they could try trading and see how it works.
?I'm acting like the New York Stock Exchange,? Oltheten said. ?You have a ?sell' order on the board for $48, and Colin says he wants to buy at $50. Why sell at $48 when you can get $2 more? The market doesn't like that. This is a trade at $50.?
For weeks, the students have been trading stocks using a recently revived UI program designed by Oltheten called the UI Securities Exchange Simulation - UISES for short.
?We've had guest speakers talk about stocks, bonds and investments, and then we do the stock market project,? said Judy Roegge, a Centennial consumer science teacher. ?They have $100,000 to spend, they choose five companies to invest in and they do it for a semester. Some students use the UI site, and some do it on paper. Their goal is to make money.?
Roegge said Oltheten brings her students to conduct the live trading class so students trading or checking stocks online can see the other side of the action.
?There's a cost to use UISES, but the UI gets sponsors so we don't have to pay,? Roegge said.
Carvell, a UI junior who is thinking about becoming a floor trader, had the hardest job, keeping the trading fair and orderly. She explained the rules to Rusk's students, how ?sell? orders and ?buy? orders must match to make a trade. UI students posted at each end of the blackboard wrote ?buy? or ?sell? orders on the board as the Centennial students announced them.
The UI students also distributed ?cheat sheets? listing basic information including:
- Buy low, sell high.
- It's in your best interest to make as many trades as possible, so be aggressive.
- Maximize your client's wealth.
One student came up with a practical idea.
?I have a ?sell' order and a ?buy' order at $50,? he said. ?Can I just trade them??
?You can't sell to yourself,? Oltheten said. ?One of your clients has said, ?Buy me shares.' If you, the broker, match that client with another one of your clients, how will the first client know he got the best price? Put them on the board, and trade with everyone out there.?
The UI students put limits on trade for the first round, but they lifted them when they passed out orders for the second round. To make the action more interesting, they passed out a lot of ?sell? orders.
?There are no buyers, and the market's going down,? said Virginia France, a UI assistant professor of finance who accom- panied the students.
Carvell advised the high school students to keep close track of their trades and especially of how much money they saved their clients because in the market, she said, winners get rewards.
Orders flew in the second round, and hands were still in the air when Carvell rang the final bell and closed the market.
Morgan Gilman was declared a winner because she saved her clients $14. Her reward? A bag of candy.
?I've learned that the market moves fast, and you have to pay attention,? she said.
?Everything has to be fair, or you lose your job,? said Centennial junior Rosa Woods, another active trader who saved her clients $11.
?There are always a few kids who are naturals,? France said.
Carvell said both her parents are teachers, so she naturally enjoys tutoring.
?This class was cool,? she said. ?The last one was slower.?
?The kids were great,? said Goodwin, a junior.
Oltheten introduced UISES, the first Web-based trading simulation, in 1993. It started as an in-class competition, but it moved to the Web in 1995 and soon became an intercollegiate competition. It also quickly spread to high schools at Champaign, Urbana, Mahomet, Tolono and other communities through the UI's Market Mentor Program.
The program takes into account all trading costs, such as brokers' fees, so students get a clear picture of what trading is like.
In 1999, UISES was taken offline, but last year, the program revived with a new server, and it was back in classrooms last fall.
?We want students to learn that a lot of activity goes on behind the scenes that they never think about,? Oltheten said. ?There are investors behind what goes on in the market. And my students are learning what you have to do to make someone understand those concepts.?
?Teaching is the best way of understanding,? Carvell said.
?The market's not as hot as it was, but somehow it's edgy,? Oltheten said.
You can reach Anne Cook at (217) 351-5217 or via e-mail at firstname.lastname@example.org.