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Car Stock Exchange Extremely Confused
30 messages, Last post on Apr 04, 2008 at 12:13 PM
You are in the Car Stock Exchange Forum.
I'm really confused by how this is supposed to work. First of all, I shorted 8000 shares of BMW M3. According to the transaction I got a price of 29.10. Now the current price is 72.45 so I should have lost $346,800. (72.45-29.10)*8000. But it shows that I have only lost $12,400. Also if $1 = 1000 sales, then how come the current price is 72.45? Does that means that market believes BMW will sell 72,450 M3s? Can BMW make that many M3s in the course of 6 months?
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Replying to: comp386 (Mar 14, 2008 5:44 am) Despite what FAQ says, the market is not trading on unit sales - I haven't figured out what it is trading on but I'm just treating it like any other stock market...i.e. find the opportunities and take them. |
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Replying to: comp386 (Mar 14, 2008 5:44 am) It's understandable why you would be confused about shorting. It's complicated, and we are looking to revise how shorting works to make it more intuitive. But here's what I see from your numbers. The price of a short in your transaction list is actually the inverse of what you shorted at -- based on a cap of $100 for the BMW M3 (all stocks except for the Corolla are capped at $100 -- the Corolla went public at $137 / share so it's capped at $1,000). Take 100 - 29.10 and you shorted at $70.90 a share, which = $579,600. You covered (or bought) your short at $72.45. Multiplied by 8,000 shares that transaction's value is $567,200. A difference of $12,400. I have posted notes about Shorting on this Forum to help clarify things, but again, we are looking to improve this feature, because it isn't apparent from the get-go. The prices are way out of line, because traders enthusiastically jumped into the market without considering unit sales projections. They just bought vehicles stocks for cars they were excited about and many traders are day-trading in an attempt to maximize short-term profits in the hopes of winning the monthly prize. We think the market will eventually correct as users become more aware that prices will eventually reset once the actual sales figures come in -- when a vehicle has been in the market for 6-months and its stock "retires." Shorting stocks is a good idea, but it's a longer term play that most likely will not pay off in the near term due to rampant day-trading in the market right now. Best, Mike CSX Game Supervisor
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Replying to: mikedrud (Mar 14, 2008 6:20 am) 
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Replying to: comp386 (Mar 14, 2008 6:34 am)
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Replying to: auditt311 (Mar 14, 2008 6:39 am) |
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Replying to: comp386 (Mar 14, 2008 6:46 am) Even if you're playing for a 6 month return, throwing a bunch of money into shorts and letting it sit there isn't going to get you very high on the leaderboard. The people who make a high percentage gain are making money off of all the price movement along the way.
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Replying to: mikedrud (Mar 14, 2008 6:20 am) This is the part that gets me. If I think a certain car is going to sell more than its current stock price reflects, I'm going to buy it, and buy a lot of it. Unfortunately, due to the game mechanics, that will cause the price to skyrocket into a realm of impossibility versus real-life production capabilities. That appears to be a flaw inherent in the system. This kinda brings me back to my previous "was a million too much" post, because a million dollars will buy a LOT of $7 stocks. I think a thousand dollars would have kept prices more reasonable because a given individual would not have the ability to affect the stock price as drastically. |
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Replying to: doctorlove (Mar 14, 2008 7:03 am) I do a lot of short term investing and that still doesn't mean I'd invest in something this ludacris. That's like going on InTrade and bidding up a single person's chance of winning the presidential election to above 100%. I may not plan to hold that purchase until time expires, but I sure as well will not invest in something stupid. The point of a prediction market is to predict something. This is just random guessing. Something is wrong with the algorithm the exchange is using. Either that or this is Holland tulips all over again.
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Replying to: comp386 (Mar 14, 2008 7:57 am) Continue to post on these forum pages, because we are listening. A lot of players have already provided us with great feedback, and since the game is still in beta, that feedback is going to help us prioritize changes to the game in the coming weeks/months. Thanks, Mike CSX Game Supervisor |
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