Guide to the Stock Market

The Stock Market is a part of Neopets that can, over time, earn you millions of neopoints without you having to do a thing. Before we start, there's a few essential points.

1) HAVE PATIENCE! Stocks may take weeks, months, or even years to rise, but as long as you have PATIENCE, they will rise. Don't get anxious or worried, even if a stock's been hovering around 15 for the past month- just take this opportunity to buy more of it.

2) NEVER SELL AT A LOSS! Selling at a loss is the stupidest thing you can do. Every stock will rise- every single one! All you have to do is wait.

3) DO NOT SELL IF YOU ARE NOT SATISFIED WITH THE PROFITS! If a stock is at 40, but you wanted to sell at 60, then wait until it gets to 60, even if it drops back down to 20 first. It'll rise again, I promise.

4) BUY EVERYDAY! The more stocks you have, the more profit you'll earn. Simple as that.

5) NO ONE CAN TELL YOU WHAT STOCK TO BUY! It's anyone's guess as to what stock is going to rise, and there is no magic stock that makes lots of nps quickly. However, not all stocks are equal. Time has shown that some stocks rise higher and more frequently than others, but we'll get to this later.


The part below is an in-depth guide. It is recommended that you read it, but if you're not interested in reading through and learning it all, you can skip down to the Easy Guide.


RANDOM VS. UNPREDICTABLE

There are generally two opinions as to how the stock market is:

Random and unpredictable?

or

Unpredictable, but not random?

Random - Those who say that the stock market is random, and subsequently unpredictable, believe that Stock A has just as much of a chance to hit 100 as Stock B. They believe that stock prices are random and every stock is equal.

Unpredictable - Those who say that the stock market is unpredictable believe that Stock A is either better or worse than Stock B. They believe that no one can predict when Stock A or B will go up, but it is NOT random.

Personally, I believe that the stock market is unpredictable but not random.


LET'S TALK STRATEGY!

There are several methods to playing the stock market. First, you have to decide your sell point, meaning at what price you'll sell. Once you set a sell point, stick to it, no matter how tempting it is to sell or hold. You make more nps in the long run.

The 15/30 Method - The name pretty much says it all! Buy at 15, sell at 30. This method is simple and great for those new to the market. Because many stocks frequently reach 30, this is good for a smaller but quicker profit. The only cons are that the profit isn't much, and stocks may rise above 30 a share, so you'll miss out on profit.

The 15/60 Method - This is probably the most popular sell point among most stock market players. Just about all stocks reach 60, and it can happen within only weeks after 15.

The 15/60+ Method - Very, VERY experienced players with portfolios that are MASSIVE are able to set sell points of over 60, sometimes 100 or more! This is because they have so many stocks, at any one time there will be at least one or two companies at 60 or above, so they can afford to wait for the very high peaks. If you don't have a massive portfolio (Read: At LEAST 100k shares), don't even think about this.

Obviously, you can set your own sell point, based on your own personal situation. The only rule with selling is to never sell at a loss!

Now that we've gotten sell points out of the way, here's some strategies to playing the market, after you've established a good portfolio.

Hyperstocking - Hyperstocking is when you buy many many stocks in only a few different companies. Most people have less than 10k shares (That's the number of shares, not the worth!) in any companies, but some people like to buy 20k, 30k, 40k and up number of shares in each company, with only a few companies. The advantage to this is that if Stock A reaches 60, you'll be able to sell 30k shares and receive 1,800,000 nps from that one sale. The disadvantage is that you may have to wait a very long time to make any profit. Those who hyperstock generally buy at 15-17 only.

Diversifying - This is generally what most people do. They have about 10k or less shares in each company, and can have a portfolio of many, many different companies, all with around the same amount of shares in each. The advantage is that if Stock A isn't rising, Stock B, C, D, or E probably is. The disadvantage is that you'll be collecting 100k here, 200k there, etc. instead of getting it all at one time like hyperstocking.

I don't advise hyperstocking, because you could receive the same amount of profit with diversifying, but over a longer period of time and with less risk. And there's always the (extremely extremely tiny) chance that a stock could go bankrupt. What if you had hyperstocked that company? That's hundreds of thousands of nps down the drain.

Another method to selling is to set climbing sell points. I personally don't use tis method, but some people do choose to.

Climbing sell points is to set multiple sell points. Lets say you have 5k shares of Stock A. You set set sell points of, say, 60, 70, 80, 90, and 100. When stock A hits 60, you'll sell 1k shares. If it keeps rising and hits 70, you'll sell another 1k. When it hits 80 you'll sell a third 1k, and so on until you have no more shares left. The advantage to this is that you'll earn more nps than if you had sold all at 60, but the stock kept rising after you sold. The disadvantage is that if a stock peaks at 60 or 70, then goes back down to 15, you''ll still have shares that you haven't sold, and profit that you missed out on.

BANKRUPTCY

What is bankruptcy? A stock is bankrupt when it's price reaches 0. Once at 0, it's dead and can never again be of any value.

How often do stocks go bankrupt? Very rarely. The last stock to go bankrupt was JCK, in November 2004. That was almost 3 years ago.

Should I be worried? No, not really. Bankruptcy has only happened to a handful of companies throughout the entire history of the stock market. Your chances of having a company in your portfolio bankrupt are very low.


THE EASY ESSENTIALS

So, you want to get to the action already, huh? Well, first make sure you have at least 15,000 nps. I recommend having much more, so you can continue to buy shares every day, but 15,000 is the minimum you need to start a portfolio.

Here is a list of stocks that are selling at 6-19 nps a share:
http://www.neopets.com/stockmarket.phtm ... rgain=true

Here is your portfolio:
http://www.neopets.com/stockmarket.phtml?type=portfolio

Here is where you'll find the most up-to-date and accurate information on all stocks:
http://www.neodaq.com


Open that first link in a new tab. You'll see a table with something like this:



The price under 'Curr' means the current price. Look for stocks that are priced 15-17 nps a share (If you only have 15,000 nps, only look for ones that are priced at 15). You are not allowed to buy any shares priced below 15.

If no stocks are at the price you want, you can wait until :28 or :58 minutes past the hour. This is when stocks change, though some stocks do stay the same.

Found a stock you like? Good! Now open NeoDaq in a new tab. On the left, under 'Stock Charts', click on 'Stocks Reportcard.' Find the ticker of the companies that are currently at 15 (from the Bargain Stocks page) and look at their grades on NeoDaq. Choose the one that has the highest grade. There are other ways to determine which is best to buy, but for now this is good for beginners.

On the bargain stocks page, Click on the ticker name and buy 1000 shares. Congratulations! You now have your very own portfolio.


WHAT IN THE WORLD DOES MY PORTFOLIO MEAN?!?!?

Your portfolio should look something like this:


Icon - This shows which industry that company is in. There are several companies in each industry. You can pretty much much ignore this. It's basically just a pretty image for you to look at.
Ticker - This is the abbreviation of the full company name, and what that stock company is referred to as. Basically the stock's name.
Open - This is the price that the stock was at at 12:01 AM NST. The market 'opened' with that company at that price. Note that the market never actually closes, you can buy and sell stocks 24/7.
Current Price - Self explanatory. This is the price that it is currently at.
Chg - The amount, in nps, that the price has changed since the opening price. If it opened at 15, and it's now 19, it would be +4.
Qty - The amount of shares you have in that company.
Paid - The amount of nps you initially paid for those shares.
Mkt Value - How much those shares are currently worth. It's the amount that, if you were to sell it immediately, you would receive.
% Change - The amount in percentage that the price has changed since you initially bought it.


SELLING

So your stocks have reached your sell point, eh? To sell, first go to your portfolio.

Click on the little ticker by the stock you want to sell:



It should now have this box:



Under 'Sell', type in the amount you want to sell. Always sell at least 1k shares every time you make a sale.

Click the 'Sell Shares' button at the bottom of your portfolio, and you're done!




FAQ

Q: If I sell 3k shares today, does that mean I can buy 3k shares?
A: No. You can only buy 1k shares a day, everyday. There's no way to buy more than 1k shares a day.

Q: Can I buy stocks on more than one account?
A: This is against the rules and will get you frozen, even if you are buying the stocks with nps funded by your main.

Q: Crap! I bought a stock I don't like! Can I return it and buy another?
A: No. If you really, really, REALLY regret your decision, you can immediately sell after buying, but that purchase counts as part of the 1k shares buyable per day.

Q: Can I buy different stocks in one day?
A: Yes. It's possible to buy 253 shares of Stock A, 572 shares of Stock B, and 175 shares of Stock C, if you want. Though I wouldn't recommend it. Buying shares in increments of 1k is neater and easier.

Q: What stock should I buy?
A: No one can tell you which one to buy, period. However, you can make your own informed decision by judging from the information on NeoDaq.

Q: If we all buy Stock A, will that drive up the price?
A: No. The Neopian Stock Market does not work like the real stock market. The popularity or amount of shares bought of a company do not affect it's price in any way. A very very long time ago it did, but users abused this and the stock market changed.

Q: How many stocks can I sell in a day?
A: There is no limit.

Q: Stock A hasn't gone up in long time! What should I do?!?
A: The only thing you can do: wait. I suppose, if you REALLY wanted to, you could sell and buy shares in a different company. This isn't the smartest option though. And remember, NEVER SELL AT A LOSS!!!

Q: I don't get this...
A: I don't know how I can make this guide any easier to follow. Seriously, I've basically cut out all the crap and fluff and given you the step-by-step instructions here. If you're SURE that your question isn't answered here, you can PM me.

Q: Should I sell now or wait and see if it goes up more?
A: Stick to your sell point. If it's not at your sell point, don't sell.

Q: Does the real-life stock market affect the Neopian Stock Market?
A: Not that I know of.

Q: What happens if you buy stocks at 15 NP, and it drops down to 14 or lower?
A: You cannot buy any more shares until it rises back up to 15. If a stock drops in price, it will rise again, even if it drops to 14 or below.

Q: What does 'Volume' mean on the Bargain Stocks page?
A: Volume is the number of shares that have been bought since the market opened.


Finished! If I've forgotten anything, please tell me. Any questions, feel free to post them here or pm me.

 

*fist pump*

There are a few more points that I have yet to put in there. If anyone has any suggestions, feel free to tell me- I may not have thought of it.

 

Re: [Finished!] Guide to the Stock Market

As I said, stocks will always rise again. Even if you buy at 15 and the next day it drops to 14 or lower.

'

Again, as I said before, the amount of shares bought or sold in a company, or the 'activity' as you put it, has absolutely NOTHING to do with how well a company does. Everyone in Neopia could buy Stock A, and it wouldn't affect it a single bit.

As for where you go to spend NP in a company and what kind of things you buy that correspond with each company, I'm not sure what you mean. Are you asking how to buy stocks?

 

Re: [Finished!] Guide to the Stock Market

Could you explain what the "Volume" column is for. Because at times it is in large numbers, other times, zero.

 

Re: [Finished!] Guide to the Stock Market

I added it to the FAQ.

 

Re: [Finished!] Guide to the Stock Market

Thanks for that. I've always wondered what volume was for, but i've never used to it decide what to buy.

 

Re: [Finished!] Guide to the Stock Market

The volume as far as im aware is the wrong way around.
Each time a stock is bought. it adds to the volume.
If you look at 00:05am there nearly all at 0
if you look at 11:55pm at night there in the 3million+ mark or something stupid