Transaction Fee Strategy

  • 8/1/2013 4:23:00 AM
  • Daniel

Student Stock Trader supports two types of transaction fees:

1. Fixed fee per transaction.

2. Percentage of the total transaction.

Both of these options can be set by the teacher at any time in the game settings section.

Besides helping to simulate how things really work in the real world, both of these options also make building a profitable portfolio more challenging and help to enforce in students that in the real world you often need to consider the cost of the transactions if your gains are small.

By introducing a transaction fee, students will be less inclined to dump stocks that perform poorly over a short period of time, if the gains are small they will be wiped out by the transaction fees.

If no transaction fee is present, students are not penalized for looking at the short term performance of a stock. That is they can impulse buy today and sell within minutes and potentially come out ahead.

Teachers can apply other variations on the transaction fee. They can set the fee to be small at the beginning of the game, then as it progresses to the end or middle of the game, the teacher can increase the transaction fee. Again reinforcing that holding onto stocks for a longer period of time generally yields better results.

 

In any case you have a think about how you want to use the transaction fee. We think it’s a powerful little tool for altering the behavior of students interacting with Student Stock Trader.