Buying and Selling Stock

The first businesses in the U.S. were small and were usually owned by one person, or a few people. But as manufacturing increased rapidly during the late 1800's, the need arose for larger factories and more expensive machinery. A few people no longer could provide the money needed to run these growing businesses.

It therefore became necessary for large numbers of people to provide the money for big businesses. Such a business, owned by many people, is called a corporation. The owners are called stockholders. The stockholders own shares of stock in the corporation

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People buy shares of stock hoping to someday sell their stock for more than they originally paid for it. A person wanting to buy stock contacts a broker, whose business it is to buy and sell stock for the public. The broker charges a commission, a fee averaging 1% of the value of the stock being bought or sold. The broker buys and sells through a stock exchange. The largest stock exchanges are on Wall Street in New York City, but there are stock exchanges in many major cities around the globe.

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The GAME!

A list of corporations and their value per share can usually be found in the financial or business section of most newspapers. There are also many sites on the World Wide Web that provide stock information. We are going to pretend for a few weeks that you have $1,000 to invest in the stock market.

The RULES!

  1. You must buy at least one share of stock from five different corporations.
  2. Your total investment (cost of the stocks plus the 1% commission to your broker) must be more than $900, but not more than $1,000.

Needed Materials: Playing the Stock Market graphic organizer.

Step 1:

Choose five corporations from the list below. Write each corporation's name in a separate space in the "Buying" section of the graphic organizer.

  • Walt Disney
  • McDonald
  • Wendys
  • Nike
  • Eastman Kodak
  • Xerox
  • Coca Cola
  • Pepsi
  • Microsoft
  • Apple
  • Hewlett Packard
  • AT&T
  • Verizon
  • Ford Motor
  • Google
  • Yahoo
  • Time Warner
  • GAP
  • Aeropostale
  • Wal-Mart
  • Target
  • SONY
  • UltraTech
  • IEC

Step 2:

Step 3: Decide how many shares of each corporation you are going to buy. Keep in mind the rules and your budget. Do the math to determine your total investment cost.  Remember...your total investment cost must be over $900 but no more than $1,000!

 

Extra Credit:

Periodically check the progress of your investment. Record the per-share value of each corporation in which you have invested. Record the value in consecutive columns on the "Track the Value of Your Stocks!" section of the graphic organizer. This must be done in your classroom during a studyhall or after school. You will earn one point for each interim check.

Step 5:

On "Selling Day," check the value per share of stock for each of your corporations. The "Last Trade" value will be the selling price. Enter that value in the appropriate column in the "Selling" section of the graphic organizer.

Step 6:

Assume that you are selling ALL of your stock. Do the math to determine your net sales.

 

 

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