Allowing 2 trades a month with no restrictions would lead to timing issues IMO.
I don't want to see 2 trades late January and another (or even 2) early February to "game" the game.
It depends on how much record-keeping you can do and want to do.
For instance, there are known FDA high-likelihood of approval/disapproval days, or just conf calls for volatile stocks.
Merger rumors.
I wouldn't want to see buying a stock one day and catching the event move and selling it 2 days later.
If you can keep track of the date each position is put on, and we require a position to be held a month and a day before it can be reversed (sold or covered), similar to the wash sale rules, I support 2 trading days a month.
I'd go further and make it 2 trading days within any 1-month period.
So if you trade Jan 11, you can trade again once until and through Feb 10 (for this Round, because we don't have to look back to December trades). With strict rules about weekends and holidays. No carryover to the following Monday if a month-end falls on a weekend or holiday.
Rules changes could be effective 2/1/2010 to be fair, rather than immediately. Players entering mid-game can only trade 1 day for the first month unless they join on the first trading day of that month.
So there would be a lot more record-keeping, probably visible only to you, Elroy, and to each player if he keeps records. It would be more open if you show the SI post # to the right of each portfolio line so anyone could go back to a post and check it. Or report any errors or too-frequent trading.
I'm also comfortable with addressing the issue of closing out a position and taking some time to redeploy the funds. We could do this several ways. I don't want to discourage diversification (5 positions), but -
Consider allowing up to 5 positions and the reverse of those positions. So everyone playing a full month gets up to 5 trading credits and if he uses them all he gets 5 reverse credits.
For subsequent full months players start with up to 5 credits to close current positions and redeploy the cash, and would be able to do this on different days, even more than 2 days.
For example, if you buy 4 stocks (and hold no cash), you can sell them the same month; or sell 2 and redeploy those funds into 2 other stocks (long or short) during the same month. When you buy the 4, you get 4 credits to sell or buy (not exceeding the 5 position limit). When you sell 2 of the positions, you still have 2 credits left to use on 1 day or 2 days for the rest of that month. So you could buy 1 or 2 more positions.
Since games currently end on the 3rd Friday of a month, I think we should allow the same trading as for full months. A leader may go to cash, and someone passes him and he wants to get back in to win. But then in the next game, should we allow 2 trades to end a round and 2 more to open one? I don't think so.
It's probably going to be easier to do this for whole months and not for periods that start in mid-month.
If it's a lot of work, we now charge 1% for the first sale (or cover) a month but we could charge 1% either direction (buy, sell, cover) for the second to discourage it. |
