For MBA student Scott Gordon, taking risks paid off to the tune of $867,000 — if only it were real.
Gordon was the winner of the first MBA Stock Market Challenge, which ended April 27, after three months of trading.
Competitors were given $100,000 in virtual money and 12 weeks on the stock market through the website investopedia.com.
Gordon said he did it because there was no risk.
“You always want to see what you could do if you had money,” he said.
Gordon said his strategy was a bit more risky than everybody else’s because he used option trading, where you have the right to buy the stock at a predetermined price at a later time, even if the price goes up.
He targeted big companies like Apple and Qualcomm and invested with them if he knew they were going to have a financially productive day.
With option trading, Gordon said you either win or lose, and he didn’t always win.
“At some point, I was down $70,000,” he said.
He said the key to winning is branching out, such as diversifying the collection of stocks held.
Gordon also said the competitors were very attached to the program.
He said that even though the money was fake, the students were on the site all the time, religiously checking the market.
“It’s challenging, but if you do your homework, you can make money in the stock market,” Gordon said.
Suyash Jain, president of the MSU MBA Finance Association, said the group had a large part in the creation of the competition.
“It was created and conceptualized by the Finance Association,” he said.
He added that the FA provided all the prize money.
Gordon received $150 for winning, second place received $100 and third $50. There also were $25 prizes for the top option trader and top earners from the four different concentrations.
Bryant Miller, MBA student and FA member, helped organize and run the event.
Miller compared the online trading to fantasy football and said after determining the goal of the challenge, he decided to go with investopedia.com.
A lot of times, challenges like this cost money to enter, but Miller said he didn’t want there to be a fee so that more people would be interested in participating.
“We wanted to encourage people who had no idea what they were doing to try it,” he said.
Overall, Miller thinks the challenge was a great success and will happen again next year, just for a longer period of time.
“We want to start at the beginning of spring semester and go until the end of the year,” he said.
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Miller said he hopes the challenge gave students a healthy respect for the stock market.
“Anyone in the MBA program should have a basic knowledge of the stock market,” he said.
