Attention all participants of Investagrams Stock Market Challenge.
A few weeks back, we have announced some changes in the tradeable stock list because we want to minimize 'intraday spread abuse' in our competition. However, despite this announcement we have observed that there are some teams who continue to abuse intraday spreads on stocks such as $CYBR, $IDC, $ISM, $ACR, etc.
Just to iterate, our point. Why are we so against this kind of action? What does 'intra-day spread abuse' mean?
Here's an example.
This is the quotation board of $IDC in the real market. The 'bid' side, on the left, is where the top buying prices and the # of shares are posted. While the on the right side is the 'ask' side, where the top selling prices and volume are posted.
Take a look at our example below.
Sometimes, when the market becomes dry, specially when the PSEi is falling, some stocks become illiquid. They barely trade and the spread between the 'bid and ask' becomes really wide. This is beyond our control since at anytime a stock may become illiquid if there are no active buyers and sellers in the real market. (even if we have pre-screened for value turnover)
In this case IDC's spread is 3.91 on the bid side, and 3.95 on the ask side. that's a 4 cent gap. At times the spread becomes as wide as 10 cents to 20 cents. You can barely trade these kinds of scenarios because they only trade for a very few # of shares (basically the stock is almost DEAD).
Take a look at the sample "Time and Sales" on the actual trading of $IDC on this certain day-- November 3, 2016.
An abuser can easily use his/her real account to rinse and repeat this kind of situation. We have observed some participants are doing this exact behavior to gain an advantage.
We would like to iterate that we highly discourage and will not tolerate "intra-day spread abuse". This is not reflective of any kind of real trading strategy. It is in our greatest interest that the participants of the Investagrams Stock Market Challenge learn about real strategies and how to manage risks in actual--not manipulated--market movement.
It is Investagrams' responsibility to protect the fairness and integrity of the competition. Thus, we have decided to implement certain adjustments to nullify any kind of abusive behavior.
Here are the changes:
When you reach the top 10 you will be graded according to the ff:
70% will be based on team's ranking and performance in the trading competition
30% will come from the Final Defense.
The 70% shall be pro-rated depending on your ranking in the top 10. Teams who have bulk of their profits from "Intra-day spread abuse" shall incur PENALTIES.
For the Final Defense you shall be given 15 minutes to present the following:
1) Your trading strategy / Approach
2) How you chose the stocks you traded
3) How you executed your trading plan
4) How you managed your risks in your portfolio
Basically, we want to see how well you know the theories and strategies that you have applied in your actual trading. Our judges shall look at your trading history if they are in-sync with your defense presentation. There will be no points or acknowledgment if most of your profits come from 'intra-day spread abuse'.
Day trading is ok, if the stock has REAL movement. But if you are abusing stocks that are illiquid, merely trading the spread repeatedly then you will not be given any CREDIT in the defense.
We shall give rightful points and appreciation towards teams who have applied real technical or fundamental strategies and have executed their trades based on real STRATEGIES.
We want to give a fair chance to everyone in the ISMC. In Investagrams, we highly value the essence of trading and investing. We want you guys to have a sincere appreciation towards learning and applying various strategies that will help you when you engage in the real stock market.
In the stock market, those who take shortcuts are often cut short... remember that.
We hope for your understanding in the adjustments that we have to make, this is for the best interest of all participants. Let's play fair and have a fruitful competition. Investagrams Stock Market Challenge shall make sure that those who win are those who are rightfully deserving.
For any questions you may contact us in our Facebook page!
God speed everyone,