More than a few investors, often to their detriment, view the stock market as a game. And while the smart money thinks otherwise, there really are stock market games out there, and they actually play a role in helping new investors understand the ropes.
These games are actually computer simulations of a actual stock markets, allowing participants to acquire a faux stock portfolio, and then generate trades in context to simulated market conditions.
Some simulators actually use a delayed feed of data from real stock markets, rather than generating the flow of data randomly. This creates a sense of realism and pace that would be beyond the reasonable scope of a game’s software.
Sometimes games depart from the real world to create a fantasy trading world, with fake securities traded on fake exchanges, though with as much mechanical realism as possible.
A Serious Agenda
The purpose of stock market games is to teach the user how to interact with the markets through an understanding of their mechanics. Of course, in any game there is a score to keep, and in this case that score is comprised of the player’s net portfolio (total assets minus any margin funds borrowed).
These games are sometimes used in schools to introduce students to the markets, but for the most part they are commercial enterprises. Some online brokers offer this feature as a way to attract new business, providing newer investors a way to get comfortable with how the markets operate.
Simulated Markets, Real Technology
Like any mode of practice, stock market games can help a new investor ease into the real world with greater confidence. But just like gambling simulators, or even boxing games, there is nothing that can prepare an investor for the sting of the real world when a trade goes wrong. That experience resides beyond the reach of any simulator, because emotion defies programming.
And the stock market, despite all its technical complexity, is nothing if not emotional.