How to play:
You can invest in shares in any UK listed company, as well as benchmark gilts and you can even go 'short'.
Just as in the real world, when you trade you will be charged commission and stamp duty and there will be a bid-offer spread. Commission is charged at £15 per trade.
Both commission and stamp duty will be calculated automatically and displayed in a contract note on screen.
The prices on the screen are adjusted delayed prices from the London Stock Exchange.
Dividend payments for stocks will be paid in cash instantly on the ex-dividend date.
You cannot invest more than 20% of the total portfolio in any one company.
If you don't trade for a period of ten days or more and have a cash balance greater than 30% of the portfolio value, you will be sent an email alert notifying you that you should trade quickly. Your account will then be moved to the bottom of the league table until trading has resumed.
Winners will be judged both on their overall investment performance and the report/essay.
There will be other prizes along the way.
The judges decisions are final.
Gilts
You may trade the 2,10 and 30 year gilts (UK government bonds).
Gilts can be bought and sold using the dirty price, ie. the clean price with the accrued interest added.
The price displayed and used for the valuation will be the closing dirty price for the previous day.
You will be charged a commission of £15 per trade and there is a bid-offer spread.
Coupon payments will be paid in cash on the ex-dividend date, which is seven business days before the payment date specified for each bond.
Going Short
You will be able to short sell a small percentage of your portfolio. Please note that this increases the risk of your portfolio.
As with buying shares, commission will be charged at a flat rate of £15 per trade.
There is no stamp duty.
When going short, 20% of the trade value will automatically be deducted from your cash balance.
The margin should always be at least 20% of the underlying trade value together with any running losses. For example, if the market moves against you and the share price increases, the new margin will be calculated and will again be automatically deducted from the cash in your account. This process will take place at the close of market each day.
If there is insufficient cash in your account to cover the new margin, you will be sent an email notifying you that you need to release equity from your portfolio to cover the new margin. The account will be moved to the bottom of the league table until the payments have been made.
All calculations on margin and adjustments to league portfolios will be made at the end of the day following market close.
If the market moves in your favour the margin will remain the same. No money will be returned to you until the position is closed.
If you decide to go further short on the same security then this will be treated as a new trade with regards to commission and margin.
It will only be possible to short up to 5% of the portfolio value at any one time.
If you decide to go from a long position to a short position, the long trade will be closed in the usual manner and commission and a margin will be required on the short position.
At the end of the game any outstanding margin on short positions will be returned and the position closed.
Prizes
The team or individual in first place in the Undergraduate category will receive a cheque for £9000.
The team or individual in first place in the Postgraduate category will receive a cheque for £3000.
There will also be 10 runner-up prizes in each category, which will be announced when the Challenge opens.
The team or individual with the best performing portfolio at the end of 30 April 2007 will receive a cheque for £200.
The team or individual with the best performing portfolio at the end of each trading month will receive a cheque for £150. This prize can only be won once by a team or individual during the Challenge.