The Enterprise Trading Game

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1 The Enterprise Trading Game A resource for year olds Entry-level game: Traders pack

2 Traders notes Contents 1 Checklist 2 Company roles 4 Sample forms 6 Practice round forms Trading request forms (3) Financial report form 9 Trading round forms Trading request forms (6) Financial report form 13 Company meeting briefs

1. Traders pack Checklist Aim To make a profit by buying barrels of crude oil at the lowest price possible and selling at the highest price possible.

3 1. Traders pack Checklist Aim To make a profit by buying barrels of crude oil at the lowest price possible and selling at the highest price possible. You will play: three practice rounds six trading rounds. Each round will last four minutes. Trading Practice rounds: You have a fund of $5,000 and 100 barrels of oil to begin trading. Trading rounds: You have a fund of $50,000 and 1,000 barrels of oil to begin trading. You can trade by buying or selling in each round. You may also decide not to trade. You will make your trading decisions based on information from the News bulletins. Each news bulletin also displays the current market price of oil. This is the price that you will buy or sell oil at during that round. Advisors estimate that crude oil may trade between $40 $140 per barrel. Remember, all trading decisions should be made as a team. Record keeping Trading limits You can only buy or sell up to 4,000 barrels at a time. Your company will be charged a fine* if you: buy oil when you don t have enough funds to pay for it at the time of purchase sell oil that you don t have in stock at the time of sale. The more often you go over your trading limits, the greater the fine that will be deducted from your final profit at the end of the game. Final round Any stock that your company has left at the end of the final trading round will automatically be valued at the final market price (revealed after the last trading round). You will need to calculate this amount and add it to your final profit in the Financial report. If you have more than 4,000 barrels left after the final round, you will be fined $5 for every barrel over this limit. The company that makes the most profit wins the game. istockphoto Trading request forms: You must submit a Trading request form to the Assistant Controller before the end of a trading round. Financial report: You will need to keep track of your funds and stock throughout the game by updating the table of accounts on the Financial report. Remember, accurate record keeping is crucial! See pp 4 5 for completed examples of these forms. Commission payments Commission is charged at $1 a barrel. These payments cover the administrative costs of the market and are for sales only. So for every barrel you sell, you will pay $1 commission. These payments are a cost and will reduce the amount of profit you make. Company ethos Throughout the game, the Controller will be looking for evidence of: good teamwork enterprising attitudes (a can do attitude, a willingness to take initiative, and a positive and informed attitude to risk) commitment to three of the Olympic and Paralympic Values**: determination, respect and excellence. Your team will be asked to feed back examples of how you have applied these qualities during the game. * If you go over your trading limits once, a 10% fine will be deducted from your final profits at the end of the game. This will increase by 10% for every round that you exceed your trading limits. **There are seven Olympic and Paralympic Values in total: respect, excellence, friendship, courage, determination, inspiration and equality. For the purpose of this game, we will be focusing on the three Values identified above.

4 2. Traders pack Company roles Your first task is to decide who s going to take on each of the following roles during the trading session. You might like to match the strengths of team members with the skills and qualities required for a role. Four to six members are recommended for each team: Chair Market Analyst/s Trader/s Accountant The role of the Chair is to: see that the team makes good progress keep control over all company meetings make sure that all members of the team have had a chance to express an opinion check that everyone has understood the significance of the news bulletins. Make sure that your team is focused and co-operative, and that all decisions are taken promptly. If your team cannot reach a unanimous decision you should organise a vote. In the event of a tie, you have the casting vote. Skills Leadership skills Listening and communication skills Qualities Diplomatic Decisive The role of the Market Analyst/s is to: assist the team with analysing news bulletins and predicting the impact these may have on oil prices advise the team on the pros and cons of buying, selling or not trading For example, this can done by asking the team questions about the impact they think the news may have on the supply and demand of oil. Skills Communication and interpersonal skills Analytical skills Ability to explain complex information simply and clearly Qualities Focused Logical Decisive Ability to co-ordinate the work of other team members Ability to motivate others Risk-taker Integrity

5 3. Traders pack Company roles cont. The role of the Trader/s is to: complete the Trading request forms at the end of each trading round ensure the form reaches the Assistant Controller before trading is suspended. Skills Ability to work with efficiency and accuracy Listening skills Numerical skills Qualities Good attention to detail errors can be costly! Nerves of steel Energetic The role of the Accountant is to: look after the broader financial well-being of the team keep accurate financial records detailing and tracking the amount of oil your company has traded (using the table of accounts on the Financial report form) produce a Financial report at the end of trading. Skills Numerical skills Ability to work with efficiency and accuracy Listening skills Qualities Enjoys working with numbers Methodical and calm Thorough good attention to detail Trustworthy and responsible All team members will: consider the impact of the news bulletins and join in trading decisions assist the Accountant with completing the trading and financial forms. Skills Information processing skills Qualities Drive and determination Critical and analytical decision-making skills Ability to work with efficiency and accuracy Communication and listening skills Respectful of others opinions Focused and motivated Ability to work effectively as part of a team with excellence

6 4. Traders pack Sample Trading request forms Practice round Company name: A1 Team Practice round: 1 Opening balance Stock: 100 barrels Trading fund: $5, barrels of $70 per barrel = $3,500 Sample barrels of per barrel = The total commission paid = Total sales = Company name: A1 Team Practice round: 2 Opening balance Stock: 150 barrels Trading fund: $1,500 barrels of per barrel = Sample 20 barrels of $80 per barrel = $1, , x $80 = $1, x $1 = $20 $1,600 - $20 = $1,580

7 5. Traders pack Sample Financial report Practice rounds Table of accounts Company name: A1 Team To keep track of your funds and stock during the game, you will need to complete this table of accounts (ledger) at the end of each round = 150 barrels Round Balance Stock Market Buy Total Sell Income Commission Total Closing Total (funds) price cost of ($1 per income (less balance stock purchase barrel sold) commission) (funds) 1 $5, $70 50 $3,500 0 $0 $0 $0 $1, $1, $80 0 $0 20 $1,600 $20 $1,580 $3, $3, $90 0 $0 100 $9,000 $100 $8,900 $11, Final market price g $100 The amount of funds and stock a team has at the start of round 1 The price of oil for round 1 $70 x 50 barrels = $3, barrels x $80 = $1, barrels x $1 = $20 commission $1,600, -$20 = $1,580 $5,000, -$3,500 = $1, = 30 barrels The table below is to be completed at the end of the practice rounds. It must then be submitted to the Assistant Controller. Opening balance (funds) = $5,000 Value of remaining stock 1 after final round = $3,000 minus commission of $30 = $2, barrels x $100 = $3,000 - $30 commission = $2,970 Closing balance (includes value of remaining stock) = $14,950 $11,980 + $2,970 = $14,950 Penalty fines 2 = $0 Net profit or loss (excludes opening balance) = $9,950 $14,950 - $5,000 - $0 (no fines) = $9,950 1 Any stock left at the end of the final round will automatically be sold at the final market price. Don t go over the 4,000 limit though, or you will be fined $5 for every barrel over this limit. 2 For every round that you go over your trading limits (go into negative figures), deduct 10% from your profit/loss. For example, if this team went over their limits in two rounds, they would be deducted 20% of $9,950, meaning a $1,990 fine.

8 6. Traders pack Trading request form Practice round Company name: Practice round: 1 Opening balance Stock: 100 barrels Trading fund: $5,000 $! Cut along dotted lines Company name: Practice round: 2 Opening balance Stock: Trading fund: $ $

9 7. Traders pack Trading request form Practice round Company name: Practice round: 3 Opening balance Stock: Trading fund: $ $! Cut along dotted lines

10 8. Traders pack Financial report Practice rounds Table of accounts Company name: To keep track of your funds and stock during the game, you will need to complete this table of accounts (ledger) at the end of each round. Round Balance (funds) Stock Market price Buy Total cost of purchase Sell Income Commission ($1 per barrel sold) Total income (less commission) Closing balance (funds) Total stock 1 $ $ $ $ $ $ $ 2 $ $ $ $ $ $ $ 3 $ $ $ $ $ $ $ Final market price g The table below is to be completed at the end of the practice rounds. It must then be submitted to the Assistant Controller. Opening balance (funds) = $ Value of remaining stock 1 after final round = $ minus commission of $ = $ Closing balance (includes value of remaining stock) = $ Penalty fines 2 = $ Net profit or loss (excludes opening balance) = $ 1 Any stock left at the end of the final round will automatically be sold at the final market price. Don t go over the 4,000 limit though, or you will be fined $5 for every barrel over this limit. 2 For every round that you go over your trading limits (go into negative figures), deduct 10% from your profit/loss.

11 9. Traders pack Trading request form Trading round Company name: Trading round: 1 Opening balance Stock: 1,000 barrels Trading fund: $50,000 $! Cut along dotted lines Company name: Trading round: 2 Opening balance Stock: Trading fund: $ $

12 10. Traders pack Trading request form Trading round Company name: Trading round: 3 Opening balance Stock: Trading fund: $ $! Cut along dotted lines Company name: Trading round: 4 Opening balance Stock: Trading fund: $ $

13 11. Traders pack Trading request form Trading round Company name: Trading round: 5 Opening balance Stock: Trading fund: $ $! Cut along dotted lines Company name: Trading round: 6 Opening balance Stock: Trading fund: $ $

14 12. Traders pack Financial report Trading rounds Table of accounts Company name: To keep track of your funds and stock during the game, you will need to complete this table of accounts (ledger) at the end of each round. Round Balance (funds) Stock Market price Buy Total cost of purchase Sell Income Commission ($1 per barrel sold) Total income (less commission) Closing balance (funds) Total stock 1 $ $ $ $ $ $ $ 2 $ $ $ $ $ $ $ 3 $ $ $ $ $ $ $ 4 $ $ $ $ $ $ $ 5 $ $ $ $ $ $ $ 6 $ $ $ $ $ $ $ Final market price g The table below is to be completed at the end of the trading rounds. It must then be submitted to the Assistant Controller. Opening balance (funds) = $ Value of remaining stock 1 after final round = $ minus commission of $ = $ Closing balance (includes value of remaining stock) = $ Penalty fines 2 = $ Net profit or loss (excludes opening balance) = $ 1 Any stock left at the end of the final round will automatically be sold at the final market price. Don t go over the 4,000 limit though, or you will be fined $5 for every barrel over this limit. 2 For every round that you go over your trading limits (go into negative figures), deduct 10% from your profit/loss.

15 13. Traders pack First company meeting brief Company name: You have completed the practice rounds. Please review the performance of your company with all team members. Agenda: Item 1: Financial report Your Accountant will need to complete the Financial report at the end of the practice rounds. Item 2: Review Select two questions to discuss with your team. Record your responses in the area provided. Notes How pleased are you with your company s performance so far? Are you in the right company roles? How do you know this? What has been the most challenging aspect of the game so far? Does anything need further explanation? What skills has your company needed to use so far? 5 6 What do you think the strengths are of your company so far? Why? How is your company demonstrating the Values of determination, respect and excellence? Give examples for each Value. You can make a change to your roles if everyone in your team agrees.

16 14. Traders pack Final company meeting brief Company name: Agenda: The Controller has asked you to reflect on the commitment your team has made throughout the game to your company ethos of: Determination: (e.g. showing focus, concentration and a drive to do well). Respect: (e.g. all team members taking part, respecting different viewpoints, making joint decisions, respecting your competitors, respecting market regulations). Excellence: (e.g. use of analytical skills, exercising accuracy and timekeeping skills, demonstrating a responsible attitude towards risk). Please comment on the following: How did you apply these Values? How did they help your team perform? What would you do differently next time? Your recipe for success After reflecting on the above, consider what your team s recipe for success would be if playing this again. Write three tips that you would give to other teams who were about to play the game for the first time. Include advice on the qualities that you think are most important for helping a team perform well. The Controller may invite your company to share your recipe for success with the rest of the class. Make a note of your ideas below: Notes Remember: All team members need to be involved in responding to this brief.

Financial Matters. Optional Extension Tips: Optional Extension Tips: Below Level Differentiation. Above Level Differentiation

Financial Matters. Optional Extension Tips: Optional Extension Tips: Below Level Differentiation. Above Level Differentiation Below Level Differentiation Reading and Discussion Tips: When discussing the explanations to the test questions, provide students with the pre-test answer key so they can follow along. Students may use