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Playing the Stock Market

By: illianatgd

The whole idea with the stock market is to "buy low, and sell high". You purchase "shares" of a "company" and when those shares have gone up high enough for you, you sell them for a profit.

Ah, but there is a risk! Companies CAN and DO go bankrupt, although it is rare. If a company goes bankrupt, you lose all the neopoints you have invested in that company. That is why the Stock Market is considered to be a "high stakes" gambling game.

One last reality check before you begin...the Stock Market is NOT a "get rich quick" type of game. If you don't have the neopoints or patience to wait for weeks...yes, sometimes even months...before you see a profit from your stocks, please play Meerca Chase or some other game. If, however, you want to make really good neopoints with minimal effort and a slight risk, and you do have the patience necessary, then this just may be the perfect game for you!

Navigation
::: Where is It?
:::
Stock Terms with Related Articles
:::
What You Need to Start
     3 Ways to Get Started
:::
The Buyers Info Page
     How to Read/Use Buyers Page
:::
Buying Stocks
     Choosing a Price
     Diversification
     Market Refresh
     How Many Shares?
     Buying A Stock
     Bonuses
:::
Your Portfolio
     How to Read/Use Portfolio Page.
:::
All About Selling with Related Article
     Reasons to Sell/Sell Point Info.
     How Do I Sell?
     Selling Fee    
Day Trading :::
What It Is/How To Do It.
Stock Myths :::
Incorrect Info Heard On the Boards
Stock Strategies :::
     "Only at 15 nps"
"Split Stocks"
"High Pricers"
"Sleeper Method"
"Cap on Stocks"
"Hyperstocking!"
"Focused Strategy"
How to Use This Site :::
Helping You Buy
Establishing Sell Points
Neodaq Forum
Bankruptcy DOES Happen :::
What To Do When It Happens
Conclusion/Contact Author :::
 

Where is it?!

The first thing you have to know is where to go to play. Go to the Games Room and scroll all the way to the bottom. See that cellphone wielding Chia? That's Nigel. Click on him and a new page will open up. At the top of this page are several links...here's where they go...

Home - This is the first Stock Market page.
Find Stocks - This is where you go to view all the latest stocks that are currently for sale. You can find these stocks either by typing in the abbreviation for the company of your choice in the box provided, or do what everyone else does...just click the here link.
News/Research - You can officially ignore this page unless you're bored. It takes a random stock and gives you fake business information about it. It has never made a difference in the rise and fall of any stock, in fact it is rarely updated, so it's just for atmosphere.
Profile - You can officially ignore this page unless you're bored.
Message Board - This goes directly to the Stock Tips Chat Board on Neopets.
My Portfolio - This takes you to your personal portfolio page. This is where you will be doing your checking for stock movement, and where you will be selling your stocks.
Buy - Usually you won't need to use this link since you will normally be choosing your stocks from the Find Stocks page and just clicking on the name of the one you wish to buy. Here you can type in the ticker symbol of your stock choice's name, and in the lower box the amount you wish to purchase in that stock. (From 1 - 1000)
Help - Neopets' official (VERY general) FAQ page.

NEW!! - Bargain Stocks Page - All stocks below 20 nps a share are listed here in an easy to read format. No more having to wade through all of them to know what's in your price range! YAY!

Back to the Top

Stock Terms

There are a few terms that you should familiarize yourself with before you read on. Otherwise you may not have any idea what I am talking about. These are just general terms used most often on the Chat Board and in explaining about the market. For further information I would suggest checking out the Neopian Times articles on the Stock Market I have provided for you below.

Lot - A Lot is a group of 1000 shares. So if I said I had "4 Lots of CHIA", that means I have 4,000 shares invested in the CHIA company. It is the MAXIMUM amount you are allowed to buy a day.
Share - A share is one piece of a company. Neopets rules state that you may not buy more than 1000 shares (1 Lot) of a company a day. Each share you buy must cost at least 15 neopoints.
Portfolio - The current list of stocks you already own. So if someone asks you about your portfolio, they are interested in how many shares you have already purchased and that are listed on your "My Portfolio" page.
Ticker/Ticker Tape - The ticker tape is that scrolling list of stock companies at the top of the stock market page and the Neodaq pages. It lists what stocks are currently buying/selling for. Black numbers mean "no change", red numbers mean "have dropped", and green numbers mean "have risen". The Ticker is the abbreviation used to designate a company. Like ACFI instead of Achyfi Enterprises.
Sell Point - The amount of neopoints a stock has to reach before you plan to sell it.
Day Trading - A very expensive and high risk way to play stocks where you buy and sell the same day (usually for very high priced stocks). Read more about this way to play the game below.

Stock Terms - Articles of Interest to the Beginner Player

For further reading, and to better understand all those terms the more advanced players are throwing at you, please see these helpful Neopian Times articles!

The Guide to Stockmarket Jargon and Terms (PT 1) - by nyyankeesfan72 - A very simple list of most frequently used terms and analogies for those who play the market. Includes tips for players.
The Guide to Stockmarket Jargon and Terms (PT 2) - by nyyankeesfan72 - A more in depth article of more advanced terms and analogies for those who play the market. Includes tips and info for players.

Back to the Top

What You Need to Start

One of the most frequent and difficult questions to answer is, "How many neopoints do I need to play the game?" In all honesty, the answer to this varies from player to player. I will try to answer it as best I can, but there will be those who disagree.

If you continue to read this page, you will see lots of "0's" behind lots of numbers. This means that there is often a substantial investment that you have to make to play the Market.

For example:
* If you were to buy the MAXIMUM amount of shares a day, that would be 1000 shares.
* If you were to pay the MINIMUM for those shares, that would cost you 15 neopoints a share.
That would mean that you would be paying 15,000 neopoints just to buy your maximum shares for the day. After 7 days, you will have invested 105,000 nps! As the purchase price for each share goes up, so does the amount you have to pay.

There are several ways you can prepare:

1 - Have a nice nest egg already sitting in your bank account. - If you take this route, you will usually have some neopoints still available for buying those little things, or keeping your shop stocked, or whatever you do with your neopoints. Although, if you are not adding to that account on a regular basis you will find yourself quickly depleting it, and eventually running out of ready neopoints to continue buying. Many smart beginners to the Market keep their shops running just to ensure a ready amount of nps available to buy their stocks...at least at first.

How much should you have in the bank then? To start a portfolio I usually recommend at least 250,000 nps. Why so much? Because it can take days, months, even years (depending on how many stocks you buy a day) to make a really good profit on stocks. You might have to wait weeks just to sell one stock, let alone the rest of your portfolio. This game IS a waiting game, and you don't want to be broke while you're waiting. If the nps are in your account, you're covered! If they aren't, you are going to have a hard time making the original buys so that you can make a profit later. Is it worth the wait? Yes. That's why so many people play this game!

2 - Play games daily for your "buy" money. - I know many players who play a few games every day to earn themselves the 15,000 nps to buy their shares. It doesn't deplete your bank account, you don't need any neopoints in the bank to start playing (you can begin today if you want), and you could even try for those trophies and avatars while you're at it. The downside is that if you aren't good at games, or really don't care to play any, you may fall far short of your 15k goal.

My only advice, should you choose this way, is to try not to use anything but "game-made" neopoints for your buys. This will ensure that your bank account fills up in a fairly consistent manner both through games and sales. It won't take long to see how much you have made just by visiting the bank! Since you aren't withdrawing nps, all you are doing is making neopoints!

3 - Combine the two above. - This is the best way to start out. Having some neopoints in the bank AND playing a few games shouldn't be hard for anyone no matter what their level of gaming skill. Then, on the days you don't feel like playing you won't have to because you can use your saved neopoints. If your bank account gets depleted...you can use your game nps to buy. It is a nice balance that won't completely deplete your account, can add to your gaming skills, and keep you from spending too much when you don't have to.

Keep this in mind - The above ways are just to get you started. After a while the stock sales you make will allow you to buy your stocks solely on the sales alone. Then you won't have to worry about where the cash is going to come from unless there is a BIG lull in the market. You have been warned. ;)

Back to the Top

The Buyers Information Page

Let's take a look at the FIND STOCKS page...

As you can see, there looks like there is a lot going on! Fortunately, there really isn't. All you have to worry about when looking at this page is the two yellow areas above.

TICKER - The first is the company name abbreviation. This is used almost exclusively when talking about a company. It is used on the Stock Tips Chat, on the tickers, and is even what you are supposed to type in when you decide to buy. You'll become very familiar with these abbreviations before you're done.
CURR
- The second yellowed area lists how much it costs to buy from that particular company right now. When you are looking to buy your shares for the day, this is the number you really need to concentrate on. Keep in mind that...
1) You cannot purchase a stock for LESS than 15 nps a share. This means that the two stocks in the above sample CANNOT be purchased at this time. All stock purchases must be at least 15 nps a share, but are sometimes more.
2) You can only buy up to 1000 shares (1 Lot) a day. You may mix them up anyway you like, (250 shares each of 4 companies, 500 shares per 2 companies, etc.) as long as it doesn't go over a Lot. What you want to watch for in this area is for shares that cost between 15 nps each and 17 nps each. (This is for maximum profit...you don't have to buy in that range, it is just highly recommended for the best return.)

So what about the rest of the stuff on this page?

Honestly...there is nothing of any great value anywhere else on the page. If you're curious though, feel free to read on.

LOGO - Well, the logo just has pictures that help you keep track of what companies are competing with who. So all the companies with a Nerkmid logo are in the same business. What does this mean to you? Nothing...that's why it isn't in yellow. :)
COMPANY NAME
- Just what it says. These are rarely used.
VOLUME
- In the "ancient days" of the stock market, volume was used to increase profits. The more shares that were bought of a certain company, the better the company did. This is no longer a fact. People abused this by grouping together and buying in huge quantities, which caused serious trouble on the market. Now, it is just a fun fact and means nothing in the game. If anyone tells you to "buy this" or "buy that" so that the company will go up, they're wrong. Buying shares no longer causes them to do anything but be added to your portfolio. Also, when a share dips below 15, the volume will show the number "0". That doesn't mean that no one owns that stock, it just won't show a number here until it is buyable because it shows how much of that stock was purchased that day. If no one can buy it, it can't list how many bought it, can it?
OPEN - At 12 am (Midnight) Neopian Time, when a new Neopian day starts, the market "re-opens". (It never really closes, but this is how things are tracked.) When it re-opens, whatever the current price listed for each company is becomes its "open price". So looking at our example, ACFI "opened" at 10...which means at 12 am NST it was selling for 10 nps a share. It is now at 11, so it has gone up 1 np since then.
CHANGE
- Here you can just look at the colors to see what's going on. (On the buying page, this really isn't important. It becomes far more important on your portfolio page.)

Black = "No Change"
Red = "Loss"
Green = "Gain"

 

Back to the Top

Buying Stocks

Ok, now you know what the stuff means, how do you know what to buy? Well, the whole point of the stock market is to "buy low, and sell high". Think of your shop. When you buy a product for it, you want to get it for the lowest price you can...then sell it for higher than you paid so that you can make neopoints...right? This is the same thing, only on a larger scale. Here are two tips to help make you a great profit!

1 - Choose a price you are willing to pay, and try to stick to it. - The usual price investors look for is between 15 and 17 neopoints a share. Since Neopets only allows you to buy stocks from 15 nps and up, you should realize that buying a stock at that price (THE lowest allowed) is your best bet for a maximum return on your investment. This does NOT mean that you HAVE to buy in this range...it is just a safer way to make the most of your neopoints. I did say "try to stick to it", not "this is the only way, so you'd better stick to it". I know people who make a fine profit buying some stocks at 18 - 25 nps or more. It is just better profit wise to try to buy as low as you can.

When you're just starting out, deciding what to pay only becomes a true dilemma when you are diversifying your portfolio. For example, let's say that the only stocks in the 15 - 17 nps range are ACFI, FAER, and SMUG. Now, if I look at my imaginary new portfolio I see that I already have 5 Lots of each of those stocks, but not of any of the others. Hmmm...perhaps I should go outside my price range and buy a stock that's CLOSE to a low price to better diversify my portfolio. At this point I might decide to buy HUW at 19 nps a share because it's the next lowest AND I don't have that stock yet. See what I mean? Don't be afraid to go outside the 15 - 17 np range.

There will be people who tell you that you are only a "good player" if you buy at 15 nps a share. These people are missing out on a LOT of profits, and not taking full advantage of the choices and diversification available to them.

To sum up...TRY to buy your stocks at around 15 - 17 nps, but don't be afraid to go outside that amount if it helps your portfolio be all that it can be.

2 - Diversify - Don't just invest in only one company, or you could end up getting burned!

I know a friend who invested over 1 million neopoints in the company BOOM. It was the only company he would buy from. Well, when BOOM went bankrupt, so did he! All those neopoints were just gone. Don't be like my friend. Buy a variety of different stocks so that you can not only be guaranteed NOT to lose your entire nest egg, but also so that if one stock is down, something else may be reaching upwards into selling range. The best portfolios are the ones that have some stocks within selling range, some stocks on their way up, and some stocks just purchased that are sitting near the buy range. This way you are balancing your portfolio and almost always will have something to buy and something you can sell if you need to.

Diversifying can be taken too far, however. If you stretch yourself too thin you'll only be selling 2 or 3 Lots of a stock and not making the big neopoints! Also, if you own too many companies, you will often be stuck holding onto stocks that just sit there...and sit there. Diversifying is good, but like medicine, it should be utilized properly lest you end up overdosing and killing your portfolio...at least in the beginning. More advanced players might consider using a strategy or simply diversifying until they have something in just about everything.

Using a Strategy to build your portfolio is a good idea! You can focus on a wide variety of stocks, but they will be stocks that actually DO something for you, and you will have a fair idea of what that is going to be. Those who use strategies when building their ports make the most profit, and since you have goals, you can actually have more fun as well! Think of it like this: Stocking your shop is not a whole lot of fun because it's mostly random stuff you bought while RSing or Sniping. However, stocking your gallery is fun because you are focused on a particular goal, and when you're done...you can always sell them for a decent profit and start a new one! I suggest you take a look at the various strategies available to help you make the most of your port!

Remember that the market refreshes every 30 minutes. - It is extremely rare to have a day without something being within the 15 - 17 np buying range, but it can happen. If you don't see something in your price range when you look the first time, but there are one or two that are sitting at 14 nps a share, or have fallen a few points and are almost within your range, that's ok! Try back in 30 minutes and see if one of the companies is now within your price range. You can do this for the entire day.

You will drive yourself absolutely mad if you constantly check your portfolio every 30 minutes. I did tell you it might take days/weeks/months to see profits, so relax. Let the game do the work for you! If it makes you feel better, check every 2 - 4 hours or so and see how it's doing. When your stock gets high enough that you are almost ready to sell, then keep a closer eye on it. Otherwise, just use the 30 minute check when you're looking to buy and waiting for that perfect price.

How many shares should you buy? - That is totally up to you! I would, however, recommend that you try to buy in even amounts so that you can keep track of things later...when your portfolio is bursting at the seams! Here is a daily price list so that you know how much you will need to buy your shares, and how much you'll get back. (I have used increments of 10, as this is easier for all to understand.)

(When bought at 15 nps a share...)

Shares Cost to Buy Sold at 30 nps Sold at 60 nps Sold at 90 nps
1 15 nps 30 nps 60 nps 90 nps
10 150 nps 300 nps 600 nps 900 nps
100 1,500 nps 3,000 nps 6,000 nps 9,000 nps
500 7,500 nps 15,000 nps 30,000 nps 45,000 nps
1000 15,000 nps 30,000 nps 60,000 nps 90,000 nps

As you can see, the more stock shares you buy, the more profit you will make. That is why most players buy one full Lot a day. It maximizes their profit, while their risk stays fairly minimal. Buy what you can at first, or just jump in with both feet and buy one Lot a day. Either way isn't wrong, but not buying a full Lot every day will make the wait on your profits that much longer.

Buying a Stock - To actually buy a stock, go to the Find Stocks page and click on the abbreviation for the company you want to purchase. So, if you want to buy FAER, just click on the abbreviation that says FAER. This will take you to the company info page. Just click the company name, and you will be at the "buy" page. Type in how many shares you want to buy, and click "Buy Shares".

BONUS!!!: If you'd like an easy to read list of stocks that are all on sale for less than 20 nps each, then this is the link you need! It's the latest addition to Neopets' Stock Market, known to regular players as the Bargain Stocks page.

Keep in mind - You can not buy MORE than 1000 shares a day of ANYTHING. So you can't buy 1000 shares of CHIA as well as 1000 shares of BOTT. You can only buy 1000 TOTAL shares. 500 CHIA and 500 BOTT would be ok, but it would also be your limit.

Back to the Top

Your Portfolio

Ok, you've decided on a stock, now where do you go and what do you do? Let's take a look at your portfolio, and see if we can explain it all to you...

The first two sections have already been explained, so let's move along...

TODAY - This area shows what your stocks have been up to all day.
Open - How much the stock was worth at 12 am (Midnight) Neopian Time.
Current Price - How much it is worth now.
Change - How many points it has gone up or down since Open.

HOLDINGS - This area shows how many shares you have, and how many neopoints TOTALLED that you have invested in that company.
Qty - How many shares you currently own.
Paid - How much you have paid to invest in this company.

OVERALL - This area is where things heat up! It is what your stock is doing FOR or AGAINST you.
Mkt Value - How much your stocks are currently worth.
% Change - Again, look for Black, Red, Green. If a stock is in the green, it can be sold at a profit. If it is black, you will just get your neopoints back. If it is red, DON'T SELL! NEVER sell for less than you paid...otherwise you have lost.

So let's take a look at BOTT in the example above. It opened at 21 neopoints a share, and is now at 20 neopoints a share. This means it has gone down 1 point since open today. I own 3 Lots of this stock, and have paid 45,000 neopoints so far for those shares (totaled together). They are currently worth 60,000 neopoints if I sold them all. This gives me a profit of +33.33 %, for a total of 15,000 neopoints MORE than I originally paid for them. Are you starting to see what's going on? Good. Let's take a look at another important area of your portfolio page...


 

At the VERY bottom of your page is a list of all your stocks information added together.

In the above example, you see these four numbers:
81,000 - This means I own 81,000 shares of stocks all together.
1,230,000 - This tells me that I have PAID that much for all of these stocks.
1,273,000
- Is how much all of my stocks are currently worth.
+3.50% (in green) - Means that if I sold my entire portfolio I would make a +3.50% profit. (Don't be upset if your % area is red or black instead of green. Stocks go up and down all the time and this number represents ALL of your stocks. You can have one stock that is sitting below 15 neopoints, and another that is skyrocketing, and STILL show a red number here. This is just a nice fun fact for you.)

Back to the Top

All About Selling!

Selling is the part most people have the worst trouble with. After all, how do you know when to sell and where do you go to do it?

In my opinion, selling is a very personal thing. The one rule to remember is...DON'T sell for less than you paid...no matter what! Other than bankruptcy, this is the ONLY way you can lose neopoints in this game. Here is a little list of questions to ask yourself before you decide it is the right time to sell...

What is my sell point? - Since there is no real way to tell if a stock is going to shoot up into galactic regions, it is best to have a sell point. This is how much you want your stock to be worth before you sell it.

When you are just starting out, having a sell point of 30 is a good start. So if you bought 1 Lot of (let's say) BOTT at 15 nps a share, you spent 15,000 neopoints. If your sell point is 30, then when your stock reaches a CURRENT price of 30 nps a share, you will make an additional 15,000 neopoints...in other words, you will have doubled your money. Now if you wait longer, you will get a bigger profit...but ONLY if it continues to rise. That's the tricky part. Hehehe!

Researching the average highs and lows of your stocks will help immensely! If you know, for example, that EEEEE regularly reaches at least 60 nps, then you may want to hold onto it instead of selling at your normal 30 points. To learn more about researching your stocks, and developing a plan for setting your sell points, please read the How to Use This Site area.

Build up your bankroll so that your stocks start to pay for themselves, or your portfolio just plain stops growing, and then move on to the next sell point of 40 - 50 nps a share. Later you can move to 60, then 90...or just stay at 60 and hold onto the stocks that tend to go higher instead. This is a good strategy, and is for the long term.

(EXTRA TIP) - May I also recommend that you don't sell ALL of your shares at once. Keep one or two Lots just in case it does end up being a shooting star. Then you won't be disappointed if it continues to rise.

Do I NEED the neopoints right now? - If you are desperate for cash, and you can't seem to get it any other way, selling your stocks is a quick way to build up your bank account.

Am I happy with the profit I have made? - You don't HAVE to have a sell point, although it is nice. If your stock has made a profit, and you just want to take your neopoints, go ahead! No one can tell you what you should sell at, and since it is YOUR portfolio you should decide what works best for you. :)

Keep in Mind - Selling all your stocks at 30 can quickly go from being a good thing, to feeling pretty silly if that stock goes up to, say, 130! So, once you sell your stock...don't look back and play the "I wish I hadn't" game. It will drive you insane! Be happy that you have made your profit, and are now waiting on your next sale.

How do I sell?

So, you've decided to sell your stocks...but wait! There's no "sell" button! Now what? Relax. TNT has cleverly disguised things with a little arrow that is kind of hard to see if you aren't looking for it.

In this example, you can see the purple star around the arrow next to AAVL. Click on the arrow next to the stock you want to sell. Now you will see a drop down list like the one under ACFI. See how the arrow has changed direction? This will list ALL of the shares you have bought of JUST that company, how much you paid for them, how much they are worth, and what % of change has occurred since you bought them. To the far right there is a box under the SELL title. This is where you type in the amount of shares you wish to sell. You do not HAVE to sell all of the shares that are listed. For example, if I wanted to sell 500 shares rather than the 1000 I have listed, I can just type that into the box.

Once you have gone through all of your stocks and typed in all the stocks you want to sell, scroll to the bottom of the page. There is a button there that says, "Sell Shares". Click that, and you will have sold all the shares you listed.

There is a fee for selling! - Keep in mind that Nigel the (jerk) Chia charges you a fee to sell your stocks, so be sure you have at least 20 neopoints ready to go for the sale. It will cost you 20 neopoints no matter how many stocks you sell. This means that whether you sell 1 share or 100,000 shares you will still only have to pay 20 nps total, NOT 20 nps per sale.

You can sell more than 1 company at a time, and the fee will not change. However, every time you press the Sell button you do get charged. For example: If I sell 2 Lots of ACFI and 4 Lots of HUW at the same time, my fee will be 20 nps. If I go back later in the day and decide to sell two more Lots of ACFI I will have to pay another 20 np fee. See how it works? When you hit the SELL button, you have to pay the fee.

Selling Your Stock - Articles of Interest to the Beginner Player

For a more detailed look at selling, and other ways to think about it that might interest you more, please see this excellent article from the Neopian Times!

Selling Strategies: The Science of Pressing "Sell" - by nyyankeesfan72 - A more advanced guide on selling.

Back to the Top

Day Trading

Ah, day trading. Quite possibly the riskiest way to play the market. However, there are a great many players who use it and enjoy it! Can you make neopoints with Day Trading? Yes you can. Can you do it with minimal risk to your nps like the regular game? Not by a long shot.

Unlike playing the regular way, Day Trading is played like this:

1. Find a stock that is at a high price. Usually well over 100 - 150 nps a share. (See LUPE below.)

RED BOX - Remember from before that this is the price that LUPE started with today. So at midnight (Neopian Time) it was selling for 273 nps a share. In Day Trading, this would be the usual time to purchase this stock.
GREEN BOX - This is how many neopoints it is worth now. Had you bought it at the opening price, you would have already seen a 10 point increase in profits.
YELLOW BOX - Although this is important in the regular game, it means practically nothing in Day Trading. Because of the higher numbers you will be dealing with, the percentages can be misleading. You may officially ignore this area.

2. Buy how ever many shares of that stock you can afford.

3. Watch it carefully every 1/2 hour to see how high it has risen, and when it gets to the point that you can't stand risking it anymore...sell it!

So here's how it would work: Let's pretend I bought 100 shares of it at 273 nps a share when the Market first opened. That cost me 27,300 neopoints. After waiting for about 6 hours, and checking every 30 minutes when the Market refreshes, I see that it has now gained 40 points and is selling for 313 nps a share! I decide to go ahead and sell. I am now walking away with 31300 nps. That's a profit of 4000 neopoints in just 1 day...in fact, less than 6 hours! Now what if it actually had jumped 80 points? 100 points? Remember that the stocks that are running over 200 nps tend to make bigger jumps than your average stocks...in both directions!

For those looking for a fast neopoint, it's tempting to use. However, in the Stock Market game the one constant is that what goes up also comes down...eventually. When a stock skyrockets into unknown territory the chance that it will crash at an alarming rate rises with each day that it stays up there. This means that you run the risk of losing everything you bought every time you play it! In the regular game the risk is VERY minimal, and you only run the chance of losing your nps in a bankruptcy.

For example: A while back there was a famous stock called BOOM. BOOM had a habit of dropping low and then bouncing way up and staying there for a short time. It was the ultimate Yo-Yo stock. Normally, it would be considered a stock buyers dream! Well, one day BOOM shot WAY up again, and naturally all the Day Traders flocked to buy their profit-making shares. I know people who bought their limit of 1000 shares at the unheard of rate of 500 nps and more! Well folks, as we all know, BOOM went belly up. All those Day Traders had faithfully hung on to it praying it would rise again. Instead, it went bankrupt, and many Day Traders lost their shirts!

At prices this steep, Day Trading becomes a risk of enormous proportions! Instead of only losing 15,000 nps should a stock bankrupt, you could lose hundreds of thousands depending on how many you buy! Yes, the fast neopoints are VERY tempting, but in my opinion this way to play is definitely NOT worth the chance of losing it all.

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Stock Myths

There are a lot of players out there who will tell you things that aren't true. Here are a few to remember when you are playing stocks:

1 - If everyone buys a particular stock, that will make it rise! - No it won't. It used to be that way, but now it is run by a mysterious program only known to TNT.
2 - If a stock goes bankrupt it might come back. - o_0 Now that's just silly! If a stock goes bankrupt, it is a "dead stock". It will not rise from the market grave no matter how hard we all wish it would.
3 - You should only buy at 15 nps a share. - Although it is a good idea for maximum profits to try to do this, sometimes it just doesn't work out. Some days there aren't any stocks in this range, or it may be a stock that you don't want or need right now. Whatever the reason, only YOU know how much you are willing to pay for a stock. Keeping it between 15 and 17 is good, but not set in stone.
4. My stock is below 15! I have lost neopoints! - Um, no you haven't. You only lose neopoints two ways in this game. One is to have a company go bankrupt, and two is to sell for less than you paid. Stocks go up and down all the time. Just wait a little while and it will come back up again. :)
5. Nigel is the official Stock Market mascot, and knows what he's talking about. - Nigel. *Sigh* What to tell you about Nigel. Less than a week before I wrote this article, Nigel told me to invest in JCK. Considering that JCK is a bankrupt stock, and unavailable for the rest of eternity, that's asking quite a bit! Nigel is nothing but "flavoring". He's there to remind you that the Stock Market still exists, and that is all. His one job is to collect the 20 neopoint fee when you sell stocks. In short, don't listen to Nigel...he's a doofus.
6 - The Stock Market isn't technically a game, so I can play it on all of my accounts. - Thinking this way is a good way to get yourself frozen! First of all, the Market is found ON the games page, and IS considered a game by TNT. Second of all, the rules for Neopets clearly state that ANYTHING that can produce neopoints...and the Stock Market does produce neopoints...cannot be played on anything but your main account. So consider this mega-myth busted.

Heard a good stock myth lately? Let me know about it, and I'll get it up here ASAP! :)

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Stock Strategies

Once you have built up your portfolio, and have gone from beginner status to intermediate status, you might be interested in having a goal for your portfolio. Maybe you would like a portfolio that doesn't pay often, but pays big when it does. Or maybe you WANT to try to only buy at 15 to maximize your profits. Here are four major strategies used by the advanced players that you may be interested in trying for yourself.

There are 6 major strategies to choose from, and no reason at all why you can't combine them into whatever works best for you either. These include:

Ok Better Best
"Only at 15 NPs" "Sleeper Method" "Hyperstocking!"
"Split Stocks" "Caps" Method "Focused Strategy"
" High Pricers"    

"Only at 15 NPs" Method

Like the title says, this is a simple strategy that requires very little research on the players part. The basic premise is to only buy stocks that are at 15 nps. While this is a worthy strategy for maximum profits, and can lead to a diverse portfolio, it can just as quickly unbalance your port. Let me give you an example:

Let's say that I am only buying stocks at 15 nps each. After 1 month I will have (theoretically) purchased about 30 lots of different stocks. Unfortunately, the only stocks that were at 15 nps on this particular month were AAVL, FISH, and VPTS. This means that I now have 10 lots of each of these stocks...but no others! I am dangerously close to putting all of my eggs in one basket...a BIG no-no in the Stock Market game. Of course, the advantage is that when it comes time to sell I will have made the maximum profit I can from each of these stocks as well.

You would be surprised how difficult it can be to try to only buy stocks at 15 nps. The strategy CAN work, but it is very limited, and there is the danger of losing the integrity of your diversification plan , or even worse...remember before when I said diversification is good when utilized properly? This one tends to go just a little over that line. You may end up with too many stocks, and not enough of one particular stock to make a decent profit off of your sales. In my opinion, it is the second worst of the strategies available to you.

The "Split Stocks" Method

For those of you who are mathematically inclined, want more diversification when starting out, or just don't care WHAT your portfolio looks like when you're done, the "Split Stocks" Method is presented as another alternative for you to use.

This method is usually employed when there are multiples of stocks in the buying range. For example, when 3 or more stocks are at 15 nps and you want all of them in your port. Since Neopets has a cap on how many stocks a person can buy a day, people who use this method feel that they are making the most of a bad situation. This way they can get at least SOME of the stocks they want in case those stocks move out of their buying range before the next day.

The upside to this method is that you will have a diverse portfolio, as well as a larger pool of stocks to choose from in your buying range. You aren't limited by only one stock being available like everyone else. Also, since you only buy at 15 nps for this method, you will always make the most that you can from each sale.

The downsides are multiple. First, it will frankly be a royal pain to try to sell your stocks. With 250 shares of one stock here, and 500 shares of another stock there, it can quickly take all the joy out of selling your stocks. Also, since you aren't buying full Lots of a stock you won't be making the most profit should only one of your stocks rise into the heights. "Robbing Peter to pay Paul" is at best a haphazard way to play, but some people prefer it, and insist that they make good neopoints doing it as well.

I have no advice for those who use this method. It honestly doesn't make much sense to me, and I consider it the worst of the bunch. But, since there are those who do play it, I thought I should at least be fair and add it to the mix. I guess I can say that if you want to try this method out, wait until you have become completely bored with the Market and THEN give it a go. Maybe it will be the spark that brings the excitement back into the game for you.

The "High Pricers" Method

This method is the "spawn" of day trading, and is often confused with it. It is for those who love to take BIG risks, and just don't want to wait for a low priced stock to rise.

This method is usually employed by more advanced players. In High Pricing, instead of buying low and selling high you will be buying high and selling for higher. Although it sounds like day trading, it isn't. The difference is that in this method you would buy a stock at, say, 100 nps a share and then sell it at, say, 175 nps or more a share a few days/weeks later. The thought behind this method is that high priced stocks tend to make bigger jumps when they do rise, so while you are still technically playing the same way as everyone else, you are theoretically not having to wait as long to cash in. High Pricers tend to advocate the buying of stocks that are at 30 and over and currently on the rise, or stocks like LUPE or POWR that have been riding high for a while. (These stocks were used as examples on 7/08/06.)

The upside to this method is that you can make nps at a slightly faster rate. If a stock is currently skyrocketing, or has been mostly up for a while you will...in theory...have less of a wait than someone who buys low and sells for higher. Many players of this method like to say, "No guts, no glory!!" This may be the method for you if you are an adrenaline junkie or VERY impatient.

The downsides are harsh. First of all, it costs a LOT more to buy these types of shares. This means you are risking a LOT more nps should the stock go bankrupt. For example: Let's say you bought 1000 shares of LUPE at 100 nps a share. That means that you have spent 100,000 neopoints on it rather than the 15,000 from buying at a lower price...that also means that is what you are risking. Second of all, stocks which are very high for long lengths of time are usually fairly unstable. While it is true that buying any stock is a risk, buying a high priced stock is even more so due to its complete unpredictability. No stock can truly be "predicted", but those that begin to soar are especially hard to guess-timate, unlike the lower priced stocks.

This is not a method I would recommend to a new player. If you wish to give it a shot and take the big risk in hopes of a big payoff PLEASE do so only if you can (a) afford to lose a lot of nps, or (b) have a stable portfolio as a backup in case something awful does happen. Personally, I feel that it isn't worth the risk, but that is only opinion. How you play is up to you, but do not say you weren't at least warned ahead of time. ;)

The "Sleeper" Method

In the Stock Market there are stocks that are known to the more advanced players as "sleepers". These stocks barely move and are often overlooked by the average players. Ah, but the more advanced players know that "still waters run deep". This means that they are aware that sleepers tend to do nothing for a LONG time, and then suddenly shoot over the 150 mark for no reason whatsoever! Well known sleeper stocks include FISH, SWNC, and (the more recent addition) YIPP.

To use this strategy, you would buy only the stocks that others seem to shy away from. You also should have a fairly high sell point, as these stocks are best sold at around 175 - 200 nps, instead of the normal 30 - 60 of the average sale. The advantage is that you can build up quite a portfolio while waiting for these stocks to move, and if/when they DO hit that sell point you are in for a LOT of nps! Many people consider those who use the Sleeper Method as "Stock Collectors". You are, after all, basically collecting these sleeper stocks and holding them for far longer than any of your others.

The disadvantage is that you might have to wait a LONG time to see any profits from them, and they are thought by many to be most at risk for bankruptcy. It's a chancy undertaking that has paid off in the end for many. Also, if you confine your buys to JUST sleeper stocks not only are you risking a major blow to your portfolio should one bankrupt, but you are also dropping neopoints into stocks that aren't going to show a profit for a LONG time. A port that doesn't pay for itself can become a burden very quickly.

In essence, if you don't mind waiting a year or two for a really big score, this may be the method you want to use. Personally, I feel that if you really want to use this method, you should combine it with a simple diversification plan just in case. To do this, buy your "Sleepers" when you can...since they ARE sleepers sometimes you only have a short window in which to purchase them. Try not to buy more than 4 or 5 Lots a week. Once you've reached your "max" on sleepers for the week, diversify with other stocks to keep your port balanced and keep the profits coming in until the big payoff. The threat of an unbalanced port can be negated by the fact that since these stocks don't move much they aren't often in the buying range, so you can happily collect other stocks as you go.

The "Cap on Stocks" Method

This is probably the most used strategy on Neopets. With this method, you decide how many of each stock you want to own before buying more of that particular company. It does lead to a diversified port, and you can build up quite a collection of stocks before you reach your sell point. It's also easy to use and there is no research involved.

Here's how it works:
1 - When you're first starting out, you buy whatever is in your price range that day. When you have around 15 - 20 different companies, move on to the next step...
2 - Put a temporary "cap" on how many of each stock you want to have. For example: Let's say I set up my goal to be 5 Lots of each stock. That would mean that once I had 5 Lots of a particular stock, I would try to buy something else that I don't have 5 Lots of if I had a choice between two or more stocks in my buying range. This can make deciding which stocks to buy a LOT easier on you. In one months time, theoretically, I could have 5 Lots of 6 different stocks, OR 2 Lots of 15 different stocks. Once you have 5 Lots of each stock in your portfolio, or close to it, move on to the next step.
3 - Raise your "cap" to the next level, and perhaps add a few new stocks to the mix. Some choose 8 Lots, others say 10. I like nice even numbers, so I'll go with 10. Keep in mind that you don't have to only buy 1 type of stock until it reaches your goal. You just don't want to go over 10 until the rest of your port is close to reaching your goal. Then raise it again.

Now all of this is fine and dandy as long as the stocks you want are within buying range when you need them to be. Sometimes that just doesn't happen.

The drawbacks to this method are that since you aren't really focusing on any particular fast/slow selling stock, you will have absolutely no clue as to what they may or may not do. It's a game of Stock Market roulette. Sometimes you do well, other times you don't. Not only that, but because you are putting a "cap" on certain stocks at certain times you may actually be missing out on quite a few good stocks in order to purchase stocks that don't pay well or often. You could end up sitting on 20 Lots of a stock that moves once every 2 years! While that may not be a bad thing to you, it can seriously put a crimp in your sales...which is the whole point of playing the market. This is a good beginner method to start with, but then you should consider branching out and doing the research to really make your portfolio work!

The "Hyperstocking" Method

If you take a good long look at the graphs and massive research that has been conducted on this site you will see that some stocks seem to make "mini-runs" to at least 60 on a fairly regular basis. This is interesting to those who prefer this method, as it means that by stocking up on these particular stocks they can make higher sales, and in turn, bigger profits! There are only about 5 - 10 stocks that are known to do this, and proponents of this method try to buy ONLY those stocks to take advantage of the "big money". Examples of the more popular stocks for this method are CHPS, EEEEE, and SHRX.

Although it seems to be a great way to earn nps, it too has its disadvantages. Namely, since you will be buying ONLY those 5 - 10 stocks, you will not have a large pool of choices when it comes to buying. This puts you in danger of losing quite a bit of neopoints should one of them go bankrupt! You should also consider the fact that sometimes there won't be one of your stocks available in your price range! Some may be way under 15 nps and some too far over. What do you do then? It is very hard to follow a method that is so confining.

Is "Hyperstocking" a good method? Yes. It has similarities to the "Focused Strategy", but since you are mainly going for the mini-run stocks it is actually very different. It is a great np maker, and I consider it second only to the "Focused Strategy". Either one is almost guaranteed to be a money maker for you.

The "Focused" Strategy

If you are looking for a strategy that will maximize your profits, and keep your portfolio diverse without going overboard, then this is the strategy for you! In this method, you will be focusing only on those stocks which have shown year after year to be proven performers. You will also be able to frankly ignore those that won't do much for other players. This means the guesswork of "what to buy" has been removed.

To use this method, you will need to do a little research. I suggest you go here...Sell Point/Report Card Table. Now above all of those numbers is something that says "Sell Point=30 (or 40, or whatever)." Now you will only focus on the stocks that have "good" grades under the sell point you wish to use. (B, B+, A, A+). These are the stocks that consistently have performed well over the history of the Market, and will be the ones you will buy for your portfolio. The advantage of this is that by using the history of each stock to properly choose your buys, you can almost guarantee to have a profit making portfolio for just a little extra effort. How do I know that these are really the right stocks? Because years of exhaustive graphing and tedious record keeping have proven it! Although bankruptcy cannot be predicted, the ups and downs of the market can be given an educated guess by using a company's past performance. Is it guaranteed? No. Is it as close as we will probably get to guaranteed? Yes.

The drawbacks are surprisingly few! The only major problem would be, what if you are only buying 6 or 7 companies, and one goes bankrupt! Since this cannot be predicted by history, it is a viable problem. Frankly, you run that risk no matter what you purchase when you play the game. I consider this the best strategy available to both new and more experienced players.

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How to Use this Site to Improve Your Portfolio

This site is a treasure trove to making a fortune in the Stock Market! All you have to do is know where to look and how to properly use the information you find. Let's start with some of the links you see to the left of the page.

Helping you buy!

When you are playing the market, sometimes you don't want to just buy whatever is in your price range. There may even be times when you have 5 or more choices that ARE within your range, and you just aren't sure what may be the best buy in that situation. These 3 areas may be just what you're looking for!

Stocks Reportcard - (Beginners) WAY at the bottom of all the links you will find a little lost link that calls itself Stocks Reportcard. This is a beginners best friend! If you can read a report card, you can read these easily! All the stocks are graded by how often they move into selling range. You can easily see how much they average, what their highest amount has ever gotten to, etc. For those who are unfamiliar with this method of grading, here is how it works:

Grade

How to Read

A+ - Best Stock Grade -
Profit usually within 6 months or less.
A - Still really good -
Profit generally within 6 - 8 months.
B+ - Slightly better than good -
Profit generally within
 8 - 10 months.
B - Good Stock -
 Profit generally within
 8 - 12 months.
C - Ok Stock -
Profit generally within
 12 - 18 months.
D - Not generally a great money maker, but has it's days -
Profit generally within
 18 - 24 months.
F - Worst stock, but ok for diversifying -
Profit generally 24 months
 or longer.

Stocks Reportcard - (Intermediate) To the left you will see a link marked TOOLBOX. There is a goldmine of info here as well. Click that and then New Reportcards. Here you can find your own personal sell point and see which stocks have performed well for those particular points. To line them up so as to be able to read them easily, merely click on the area you are interested in learning about. Like this:

1 - Find your sell point at the top of the page. Mine happens to be 60 right now, so I'll use that.
2 - Scroll over to that and click the word GRADE underneath the 60. Notice how the page refreshes? That is because all of the stocks are now aligned from the best performing stocks to the least for that particular sell point. I now know which stocks have paid out the most often for that sell point.

The grades are slightly different for this sell point than for the beginners reportcard seen above, as each sell point will have different dates between peaks due to the higher or lower sell point amounts.

There is also other information that you can research there as well, but now you know that you merely click on what you are interested in knowing about to find out what you need.

STOCK CHARTS -  These two links can be your best friends...IF you know how to use them. They are also geared towards more advanced players. If you're just starting out, you may want to stick to the Reportcard charts until you get the hang of it.

Thumbnail Links - (Intermediate) Want an overview of all the stocks at once, and don't want to click on a bunch of buttons? Just check out this link! All of the graphs have been downsized so that they are all on one page. This way you can just take a glance and see which ones seem to move quicker than others.  To enlarge them, simply click on them to see things closer up. For a more in-depth view, however, stick to the Text Links (See below.)

Text Links - (Advanced) On this page, you will find a large table with stuff like this...

AAVL Full - 31 Days - 72 Hours

Here's where this will do you serious numbers-crunchers some good...

Over the course of many seasons, the researchers here on the Neodaq Site have compiled quite a list of information about the movement and behavior of each and every company. In order to use this tool properly, you must be able to read the graphs. Each link has a graph that shows you what that stock has done in the past, so that you might make a good guess as to what it may do in the future. For example: If you look at the graph for AAVL on FULL you will see what it has done for the past 2 years! If you look at the 31 DAYS graph, you will be able to see it's last peak. Is it way up past the red line? This means that it is currently peaking, and is not a good buy right now. Has it been a while since it last crossed that red line? It might be a good investment as it could rise soon. Look at the history, does it peak often? Rarely? All of these things could factor in your equation to help you make a better choice for your buys.

Advanced AND Self-Motivated? - If you are this advanced, you may want to decide for yourself how you want to create your charts, graphs, etc. In that case, you may want to check out the links for Richie's Data Mine, and Raw Data. For questions concerning these areas, please contact Richie02474. He is the genius behind them, and frankly they go WAY over even MY big head.

Using the Site to Establish and Decide on Your Sell Points

Still want more proof that this site has everything you need to create the most profitable ports in Neopets? If you check out the Sell Point/Report Card Table page you will find an exhaustive list of information concerning:

  • Which stocks are best to buy in your particular sell point range.

  • How your sell point range will affect the grades of the stocks you wish to buy.

  • How many days you can expect to wait until your stock enters your sell point range.

...and much more! Again, for questions concerning this goldmine of information, please contact Richie02474 who is the genius behind the math! You can also read about the best way to utilize this incredible information by checking out Richie's explanation on the Neodaq Forum.

Neodaq Forum

There is no other site anywhere with as much information about the Stock Market as you will find on the Neodaq Forums. Any question you can think of has probably already been posted...twice...and is just waiting there for you to read. Asking questions isn't the only thing you can do there either. Here are some of the highlights of what the forum can offer you!

  • Questions and answers about anything and everything related to the Stock Market.

  • Comparisons of others portfolios and strategies to help you make the most profit.

  • Tips to help you build your portfolio.

  • Camaraderie between you and other players.

  • No having to wade through posts that aren't relevant to what you want to know.

  • REAL help from REAL people in REAL time.

Of course, these aren't the only things it offers! There are other areas concerning Neopets as well, and the information there is just as astounding! This forum is easy to navigate, easy to understand, and even easier to enjoy! From a beginner, to that guy with the folder on every buy he's ever made, the forum has something to offer.

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Bankruptcy DOES Happen

Now that we have discussed all the pros and cons of just about everything, let's talk about the one thing nobody in the Market likes to talk about...Bankruptcy.

Bankruptcy is a fact of life in the Stock Market. All stocks, no matter HOW great they've been in the past, are at risk of one day going belly up. This is a fact, not a myth. Whenever you play the game you are running the risk of losing through bankruptcy. It is the reason that Neopets still lets you make neopoints off the game, because they know one day they'll get ya!

Seriously though, many players have had to deal with this issue and it's only fair that you are informed about it as well. When it happens the most important thing is to not panic! If you have followed the diversification rules above, you are going to be ok. Should one of your companies go bankrupt, here's what will happen:

First, you will get a nasty sinking feeling in your gut. Then, you'll click over as fast as you can to your portfolio to see if it really did happen. There, you will see your company logo, and a big fat "0" where all the numbers should be. It is not coming back. Time to move on. Unless you want to keep looking at that nasty dead thing, might I suggest that you remove it from your inventory? There is absolutely no reason to keep it, as NO stock comes back from bankruptcy.

Let me reiterate - As long as you have diversified your port, you will bounce back just fine. Yes, it really bites to lose all those nps, but we've all been there. You have other neopoints to make, so mourn if you must and then move on.

IF, however, you have NOT diversified your port, you might be in a spot of trouble. Assuming you have been playing for a while, a bankrupt company in a portfolio that isn't diversified is a death knell. It is extremely difficult to bounce back from a blow of those proportions. If you decide to continue playing, kudos to you! I do hope that you will diversify this time though.

Bankruptcy is really the ONLY way you can lose neopoints playing this game if you've been playing it correctly. Try to look at it this way...think of ALL the neopoints you have made over the months/years. Now the loss doesn't look so big, does it?

In Conclusion...

Just keep in mind that no matter how red your stocks may look, they will one day turn green. It may take a while, but they'll get there. Take it slowly, don't be afraid to ask questions, and you'll be on the road to being a Stock Market Guru in no time! I do hope this article helps get you started on your new path, and that you become successful like so many other Stock Market players. Good luck to you, and happy profit-making!

If you still are having problems with the market, or you just want to clarify something you read in this article, feel free to drop me a neomail. My username is illianatgd.

A BIG thank you to w3neo who owns the Neodaq.com site and forum! Without you, and your bevy of crack researchers, we would all still be very much in the dark when it comes to the Market! Thanks again, w3!!!

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