Speculator

THE "SPECULATOR" STOCK, BOND, OPTIONS AND FUTURES TRADING GAME -- FAQ'S

 WHAT IS THE "SPECULATOR" SIMULATION? Speculator is a highly realistic stock market game, in which up to 10 players (9 of whom can be computer players) compete among themselves, trading in the treacherous stock, bond, options, and commodity futures markets, to try to grow an initial stake of $100,000 into the millions -- or lose it all! 

WHAT IS THE TRADING ENVIRONMENT LIKE? Players do their trading and investing in a simulated "live" stock market environment and global economy, with a constantly scrolling stock ticker and news headlines ticker, while keeping one eye on a "watch list" of stocks whose prices are constantly changing, and flickering, constantly changing commodity prices and interest rate quotes and economic data. Play is occasionally interrupted by important news announcements that can signal major changes in the investment climate, which you will need to adapt to in the best way you can.

You will quickly find, because of the very realistic stock and bond pricing in the simulation, that "good" companies are almost always trading at very rich prices, and that stocks that look cheap usually have serious problems and will need some good luck (or a lot of time) for their fortunes to change for the better.

Hmmm.... This investing thing isn't easy!!

Accordingly, we think you will find that making profitable investments in Speculator is almost as difficult as in the real stock market. If you buy stock of a company that isn't doing well, you may need a lot of patience before it turns around -- if ever. Or, if you invest in a hot stock that is "on a roll," you will usually find that it is already trading at a high P:E (price-to-earnings) multiple, so it will likely take a nosedive if anything goes wrong, like a "miss" or decline in its earnings. Thus, you will need to keep one finger on the trigger, hitting the "Sell" button at the first sign of trouble for the stock, since there is little or no margin for error with such "high-flyers." 

HOW LONG DOES A GAME LAST? Each game (which can be saved at any point) lasts for 1 to 30 years, as you choose at the start of each new game. In the "shareware" version, games are limited to 3 years, and the more sophisticated trading tools (buying on margin, short-selling, options trading, and futures trading) are enabled, but you will have to be an excellent stock and bond trader to become eligible to use those advanced methods in only 3 years of play, since you have to increase your initial $100,000 stake to $200,000, $300,000, $400,000 or $500,000 before you are eligible to use those advanced trading tools. 

WHAT IS THE SETTING? The game assumes you and each other player has gotten his or her "stake" of $100,000 to start the game the old-fashioned way -- you inherited it. You can play in an income tax-free environment (where the money inherited is assumed to be in a tax-free retirement account), or can play at Level 2, where you pay income taxes on dividends and interest you receive, and (at a lower tax rate) on capital gains, if any. Or play at Level 3, which is the same as Level 2, except that companies in certain industries may become subject to special taxes on capital that can reduce their profitability, such as carbon taxes, health care taxes, etc., which can make some of the usually profitable industries less profitable to invest in and can cost you dearly if you have already invested in companies that suddenly become subject to newly adopted taxes.

WHAT IS THE OBJECT OF THE GAME? As you may have already guessed, the object of the game is to increase your initial $100,000 net worth as much as possible by shrewd investing. In the Registered (paid) Version, you are given 30 years in which to try to build this modest nest egg into a fund for your retirement. At the end of each game, the program will tell you what your average annual rate of return was on your portfolio and will evaluate how well you have done. Or how poorly -- in short, whether the result of your investing will be to spend your retirement years dining on lobster and caviar on your yacht, or surviving on Nine Lives Tuna and sleeping under bridges. 

(The other, less obvious, object of playing Speculator is to give you a sense of what it is like to invest in stocks, bonds, options and futures, in an online discount brokerage account, and perhaps teach you a thing or two about the real world of stock market investing, how to do investment research, and to gain a better understanding of what makes stocks and bonds go up or down. In short, learn to invest by doing, seeing what works and what doesn't.) 

ARE THERE TRADING RESTRICTIONS? Initially, in each game, because you are a "newbie," your stock brokerage firm where you have your account (McSwindle, Churn & Tout, for example) will only allow you to invest your $100,000 inheritance in stocks and bonds, including convertible bonds and Exchange-Traded Funds ("ETFs"). Nothing too fancy or risky is allowed initially, since you are considered a novice at investing, until you can prove otherwise, by making good investments. "It's for your own protection...." In short, you will need to demonstrate that you are skilled enough at investing to be eligible for a margin account, or to engage in short-selling, options trading, or futures trading, before your brokers decide that you are eligible to engage in those riskier strategies, although some of the ETFs can fluctuate wildly and are quite risky as long-term investments. Once you have doubled your initial $100,000 stake, you will be approved for margin trading (i.e., borrowing from the broker, to buy stocks or bonds). If you can increase your net worth more, to $300,000, you can then begin to also do short sales of stocks, a more risky trading strategy. 

At $400,000 of net worth, you become eligible to trade put and call options (on stocks), which can be even riskier, but options can also be used in very conservative strategies like covered call writing, if you are so inclined. If you can build your account net worth up to $500,000, you will have become an expert trader, a "gunslinger" eligible for trading futures on any of several commodities (oil, gold, silver, wheat and corn) and on the Stock Market Index of the all the stocks in the simulation (of which there can be up to 1,590, though the usual number of "live" companies is about 1,000 to 1,200). (Once you achieve a new Trading Status, you will not lose that status even if your net worth falls back below the required minimum.) However, if your investments do very poorly, you may go bankrupt, or if your initial account value of $100,000 falls below $10,000, your broker may soon close your (too small) account, in which case you will be ejected from the game. (Game over. Goodbye!) 

CAN I PLAY IN CURRENCIES OTHER THAN U.S. DOLLARS? Yes, you can configure each game, at the start, in any of 18 other currencies (Euros, Pounds, Pesos, Swiss Francs, Ringgit, Shekels, Yuan, Rand, Reals, Aussie dollars, etc.) and each currency has a default exchange rate that was up to date at the time the program was released. (You can reset the exchange rate if the default rate has become outdated or unrealistic, at some future date, since real-world currency exchange rates do change, sometimes greatly, over time). Thus, if you choose to play in another currency, you will start off with the equivalent of $100,000 U.S. in whatever currency you selected.

WHAT ARE THE "ROOTS" OF THIS SIMULATION? Speculator has its roots in the popular Wall Street Raider game, but is considerably more challenging, since you have to make your market profits in Speculator by smart investing (or speculating). In Speculator, you don't start out as a billionaire, but just as a small, middle-class investor, who has inherited a nice $100,000.00 "nest egg." You are not allowed to take control of companies or try to manipulate their stock price, as you can do in Wall Street Raider. In fact, no matter how successful your investments are in Speculator, you are not allowed to acquire more than 5% of the stock of any company -- and even that will be a stretch, considering that you start out with only $100,000 U.S. or the equivalent in any of 18 other currencies. (Euros, Pounds, Yuan, etc.) and that it will usually take at least tens of millions of dollars to buy 5% of a company.

If you are accustomed to playing Wall Street Raider, you know it is mainly a game of corporate high finance, where you, as a billionaire, are able to take over companies and use all types of complex megabuck corporate transactions, such as mergers, liquidations, buybacks, spin-offs, and interest rate swaps to build a corporate empire, manipulate company earnings and stock prices, and dominate whole industries. In contrast, in Speculator, you are just a "little guy," or "retail investor," trying to grow that initial $100,000 nest egg you inherited into a nice, comfortable retirement fund in 30 years.

As such, you have to acquire the skill to sniff out good investments and sell them when the time is ripe, thus Speculator is designed to realistically test and hone your skills as a value-seeking investor or trader. The simulation gives you a wide range of tools to do your investment research, both to find stocks and bonds that look attractive (or stocks that are good short sale candidates!) and to do in-depth research on any company you focus on.  Meanwhile, a contantly updating "Daily Market Commentary" (a sidebar to the General Research Menu) gives you a text commentary on current trends in the economy (the game's economic model, not the real world economy), as well as on trends in the stock market index, interest rates, commodity prices, and the outlook for individual industries.

 As in Raider, all the big corporate transactions (mergers, megabuck swaps derivative deals between companies, etc.) still are occurring in the economic/market model in Speculator, but as a small investor, you are not a deal-maker, or corporate baron, just an innocent bystander, a small investor who simply observes these things as they occur, and tries to figure out how to profit from them -- and how to avoid being trampled by the market elephants.

For example, as in Raider, you are able to vote your shares of stock on a proposed merger, when another company is proposing a merger deal with a company whose stock you own, which will often make or break the deal; but how you vote your measly few hundred or few thousand shares in Speculator is very unlikely to have any effect on the outcome, when millions or billions of shares of stock are being voted for or against the merger. Thus, like most real-world individual stock investors, other than a few billionaires like Warren Buffett or Carl Icahn, you can only observe the proceedings and try to make sense of what you see and perhaps profit from it. 

ARE THERE CHEATS? Of course! You can cheat by getting "inside information" that is usually extremely valuable, but you run the risk of being subjected to massive fines for being a "tippee" who has engaged in illegal "insider trading." Or you can simply add up to $500,000 to your account. Naturally, if you use any of the cheats, you will be disqualified from being the winner of that game, but can continue playing. Also, your Trading Status (Novice, Margin Trader, Short Seller, Options Trader, or Futures Trader) will be frozen at the level you had achieved immediately before you cheated, so you can't use the cheats to raise your Trading Status -- you have to EARN your higher trading privileges by making good, smart investments, before your stockbrokerage firm will allow you to dabble in more exotic and risky market tools and financial instruments. 

WHAT IS THE LATEST VERSION OF SPECULATOR?  The most recent release of Speculator is Version 4.11, a minor upgrade that mainly made the stocks on the "streaming quotes" watchlist clickable, so that clicking on the name of a stock instantly makes it the "Selected Entity" -- the stock which you will either be trading or researching, or to buy or sell its corporate bonds. This version also makes whichever screen choice you made -- 3 small screens (a main screen, a streaming stock quotes screen, and a screen with constantly updating commodity, interest rate, and economic indicators), or one large screen (with all the same streaming information included) -- the default screen that will load the next time you start the program, until you change the default view again.

Version 4.10, released August 14, 2023, was a more significant release which added automated complex options strategies for options trading trading and also updated all of the 18 currency exchange rates vs. the U.S. dollar. The new automated options trading menu allows you to choose any of 14 complex options trading strategies from the menu, ranging from relatively simple covered calls or "married puts" to more intricate strategies such as Condors, Butterfly spreads, Iron Condors or Iron Butterflies, which the program instantly assembles on the Advanced Options Trading Station screen (see below), for your approval or to make any changes, before executing all the trades simultaneously.

Version 4.0, released October 1, 2022  ($21.95 U.S.),  added an exciting new "Advanced Options Trading Station" screen, similar to what some real world brokers offer. This single screen allows you to create sophisticated options trading strategies, entering up to 8 option trades that can all be executed at one time.  These advanced strategies include straddles, strangles, vertical bull or bear put or call spreads, calendar spreads, Butterfly spreads, Iron Butterflies, Condors, and Iron Condors, all of which are very esoteric trading techniques used by professional options traders. Detailed "HELP" instructions, with examples, teach you how to construct such complex options positions, to try out the various strategies.  Of course, you can still do simple options trades, doing one buy or sell trade at a time. (Or now, in new Version 4.10, you can simply pick one of 14 complex options strategies from a menu and let the software create the positions, ready for you to execute.)

Version 4.0 also introduced price alerts a player can set, to notify the player when a particular commodity or cryptocurrency reaches a price the player specifies; and we also added rate alerts for when the Prime Rate, Long Bond Rate, or Short Bond Rate reaches a level specified by the player, or when the growth rate of the economy (GDP) rises or decreases to a certain level. Version 4.0 also has added new database search criteria a player can utilize, including the ability to only select companies that have positive cash flow as possible investments or, conversely, a search criterion to identify stocks that may be good short sale candidates, among the 1,590 corporations that can exist in the simulation.

Version 3.0 was released in 2021, with new features that included the (simulated) ability to invest in Bitcoin and Ethereum cryptocurrencies, both of which fluctuate wildly, by trading the shares of two new ETFs, one of which only holds Bitcoin and the other only holds Ethereum. We have also added a rare but possible scenario where most world governments might totally ban one of the cryptocurrencies, crushing your investments in it, as yet another "Black Swan" event that can sometimes occur in Speculator, without warning.  Players can buy or short the shares of any of the 22 ETFs in the simulation, or trade put or call options on them, so in effect, you can now trade options on the cryptos, since the two crypto ETFs trade almost in perfect tandem with their underlying crypto holdings.  In addition, this release recognizes that inflation may be coming back in the real world, so to remain relevant and realistic, Speculator now builds in inflation in certain assets, which can serve as inflation hedges during a game. These inflation hedges include gold, silver, and the two cryptocurrencies. Other new features include refinements to both player and corporate cash flow projections. See our UPDATE NEWS PAGE on the Ronin Software website for more details on the latest releases of Speculator. Also, check out  the  video series by a Canadian fan of Speculator,  on  YouTube.

The previous release, Version 2.0, was published on August 5, 2020, and also included a number of major new features, including cash flow projections for corporations, 5 new ETFs (three bond fund ETFs -- government, investment grade, and junk bond ETFs, plus two 3x leveraged stock index ETFs, one long, one for shorting the market), and a potential new hazard -- a pandemic crisis that can suddenly decimate markets!