Trading on the Iowa Electronic Markets
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Transcript of Trading on the Iowa Electronic Markets
Trading on the Iowa Electronic Trading on the Iowa Electronic MarketsMarkets
Introduction
Introduction Introduction
The IEM is an on-line futures market Payoffs are based on real-world events such
as:– political outcomes
– companies' earnings per share (EPS)
– stock price returns Operated by University of Iowa Henry B.
Tippie College of Business faculty as an educational and research project
AgendaAgenda
Signing up for an IEM account Connecting to the IEM Navigating in the IEM Trading with the IEM Getting Account Information Getting Market Information
Signing Up for an IEM AccountSigning Up for an IEM Account
Start at
http://iemweb.biz.uiowa.edu/signup Follow instructions provided in class
– Warning: use only forms that you were instructed to use.
– Using the wrong forms may result in additional fees
Connecting to the IEMConnecting to the IEM
Connect using a web browser– Internet browsers are Microsoft Internet
Explorer, Netscape, AOL, etc. Web address:
– http://iemweb.biz.uiowa.edu/
Logging Into the IEMLogging Into the IEM Address:
– http://iemweb.biz.uiowa.edu– Select the “login and trade” link.
Logging into the Practice Markets– Trader ID: aaa, bbb, ccc, …– Password: aaa, bbb, ccc, …
Logging into your own account:– Use Trader ID and password received from the IEM– For security, CHANGE YOUR PASSWORD the first time you login!
Logging out– REMEMBER to log out for security reasons!
Using the IEMUsing the IEM
Trading screen divided into three sections– Market Window
shows current market status
– Trading Console where you enter your orders
– Navigation Bar to move around between markets or generate
reports
The IEM ScreenThe IEM Screen
The WebEx Market WindowThe WebEx Market Window
The Market WindowThe Market Window
Top panel of your screen Shows
– current market information– your holdings in cash and assets– your outstanding orders
The WebEx Navigation BarThe WebEx Navigation Bar
The WebEx Navigation BarThe WebEx Navigation Bar
Bottom panel of your screen 5 buttons:
– "Go To Market" Button– "Market Info" Button– "My Account" Button– "Help" Button– "Logout" Button
Trading in the IEMTrading in the IEM
Trading Rights– All traders can trade in political markets– Only academic traders can trade other markets
Markets and the Objects Traded– IEM contains many markets
Each market is related to some future event
– Assets are the objects traded in the market The future event determines how assets in the
market will payoff
Trading in the IEMTrading in the IEM
Three ways to buy and sell assets
– Market Orders
– Limit Orders
– Bundle transactions
Market Order: DefinitionMarket Order: Definition Request to buy or sell an asset at the
current ask and bid price
Consists of:– Instruction to buy or sell– Asset ticker symbol– Quantity you wish to trade
Placing a Market OrderPlacing a Market Order
Use the market order menu
Choose the asset you wish to buy or sell from the Action/Asset select list
Specify the quantity
Click on the Market Order button
Market Orders in WebExchangeMarket Orders in WebExchange
Limit Order: DefinitionLimit Order: Definition A request to buy or sell an asset at a specified
price for a specified period of time Consists of:
– an instruction to buy or sell– an asset ticker symbol– the quantity you wish to trade– a price at which you are willing to trade– an expiration date and time after which the order
will not be traded
Placing a Limit OrderPlacing a Limit Order
Use the limit order menu Choose the asset you wish to buy or sell
from the Action/Asset List Specify
– price– quantity– expiration date and time
Click on the Limit Order button
Limit Orders in WebExchangeLimit Orders in WebExchange
Buying and Selling BundlesBuying and Selling Bundles
A bundle– is a set of assets which can be purchased from
or sold to the exchange at a fixed price– This fixed price is the guaranteed aggregate
liquidation value of the assets– Processed as market orders in IEM
Withdrawing OrdersWithdrawing Orders
You can withdraw any of your bid and ask orders as long as they have not traded or expired.
To withdraw an order– Access the market in which the order was placed.
– Click on the bid or ask hypertext to the right of the appropriate asset
– Find the order you wish to withdraw and click on the word delete to the right of the order
– Once an order is deleted it cannot be retrieved
Order QueuesOrder Queues
Limit Orders are maintained in queues Orders are listed in these queues in priority order.
– Bid orders with higher prices have higher priority than orders with lower prices.
– Ask orders with lower prices have higher priority than orders with higher prices.
– Within a particular price, older orders (orders that were placed sooner) have higher priority than newer orders.
Other Aspects of TradingOther Aspects of Trading
Short Sales and Margins– You cannot sell short or buy on margin– Feasibility Checks
Self Trades– You cannot trade with yourself
Spinoffs and Splits– The IEM governors can declare asset spinoffs and splits
Asset Liquidations by the Exchange– The liquidation formula describes how and when assets
will payoff– Once assets are liquidated, they can no longer be traded
Other Aspects of TradingOther Aspects of Trading
Short Sales and Margins– You cannot sell short or buy on margin– Feasibility Checks
Self Trades– You cannot trade with yourself
Spinoffs and Splits– The IEM governors can declare asset spinoffs and splits
Asset Liquidations by the Exchange– The liquidation formula describes how and when assets
will payoff– Once assets are liquidated, they can no longer be traded
Other Aspects of TradingOther Aspects of Trading
Short Sales and Margins– You cannot sell short or buy on margin– Feasibility Checks
Self Trades– You cannot trade with yourself
Spinoffs and Splits– The IEM governors can declare asset spinoffs and splits
Asset Liquidations by the Exchange– The liquidation formula describes how and when assets
will payoff– Once assets are liquidated, they can no longer be traded
Reports About Your AccountReports About Your Account
Trades Report Outstanding Asks Report Outstanding Bids Report Orders and Order Resolution Report Portfolio Report Liquidation Report
Reports About Your AccountReports About Your Account
Trades Report Outstanding Asks Report Outstanding Bids Report Orders and Order Resolution Report Portfolio Report Liquidation Report
Reports About Your AccountReports About Your Account
Trades Report Outstanding Asks Report Outstanding Bids Report Orders and Order Resolution Report Portfolio Report Liquidation Report
Reports About Your AccountReports About Your Account
Trades Report Outstanding Asks Report Outstanding Bids Report Orders and Order Resolution Report Portfolio Report Liquidation Report
Reports About the MarketReports About the Market
Price History– Daily contract volumes, dollar volumes, high
prices, low prices, average prices and closing prices
Current Quotes– Best bids, best asks and last trade prices
Prospectus– READ IT BEFORE TRADING!
Reports About the MarketReports About the Market
Price History– Daily contract volumes, dollar volumes, high
prices, low prices, average prices and closing prices
Current Quotes– Best bids, best asks and last trade prices
Prospectus– READ IT BEFORE TRADING!