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Tips For Success In The World’s First Sports Stock Market |
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Submitted by Janeane Carnagie
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The AllSportsMarket is a financial exchange using a professional trading platform to buy and sell issues of sports teams. It is just like the stock market, but with sports teams! You compete with other players for real money. Money is earned from the ups and downs of the prices of teams and from dividends paid when teams win. The AllSportsMarket is 24 hours, 365 days a year - you can trade at anytime and as often as you would like.
You can fund an account for as little as $25 or try the “no catch guest entry” to check out the user interface. Unlike the stock market, where you need a hefty upfront amount to get started, and gambling where you can lose all your money at once, you can start off with a minuscule amount of money and not lose it all in one shot.
Buy Low and Sell High
Just like the stock market, you make money off of the ups and downs of the underlying security. In the case of the AllSportsMarket, the security is the issue of the team. Buying shares with the intention of selling them later at a higher price to make a profit is called long. In ASM, you make the difference minus the total commissions you pay.
This is the simplest way to make your gains, but it does take some timing and patience. The big question is what do you consider high low? A good thing to look at is the prices of the rest of the teams in the league. You should expect that the better teams will have higher prices, but there will be the occasional discrepancies for one reason or another. With that said, you have a range of prices and you should look to buy good teams that are in the low price range. Do as much research as possible to find out what teams are being undervalued.
Dividends
Another way to make money (and one of the keys to success in ASM) is dividend payouts. Every game your team wins, the dividend pot grows. You are paid dividends based on league specific pay outs and payout schedules.
The dividend strategy is an approach to make gains from dividend payouts. This is where you buy shares of a team specifically to capture the dividend payout. There are different dividend payout schedules depending on the league you own shares in. The teams that have higher dividend reserves pay higher dividends. Dividend reserves change from game-to-game depending on the leagues specific rules of dividend transfers for the winner and loser of the game. In the trading platform they list the highest dividend reserves (see the figure on the right).
Dividends are great in the sense that they reward for choosing winning teams. For example, over the course of a long season, the Detroit Pistons will likely win more than they lose, and will therefore pay out a good amount of dividends.
You need to be careful when buying shares solely for dividends - the share price may go down leaving you with a net loss even after you capture the dividend.
Selling Short
You can also make money selling short. This involves borrowing a share and selling it expecting the share to decline in price so you can buy it back at a lower price. Selling short can be more risky due the fact that you can lose more than what you put in since the price has an unlimited upside potential. When you long, the stock can only go as low as $0.00 and you only lose as much as you put in. When you short you could lose what you put in and more.
For more tips and strategies, visit http://allsportsmarket.sportslizard.com/ and download our free eBook.
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