Credit-Suisse Sales + Trading Simulation
What is a Stock?
How to Choose a Stock
Active Trading vs Portfolio Management
How to start testing multiple strategies
What is Portfolio Management Strategy?
What is Diversification?
What is the Diversification Score?
How to Build a Basic ETF Portfolio
What are asset-classes?
What is Industry Exposure?
What is Geopolitical Exposure?
How to read impact on diversification
What is an ETF?
How to Choose ETFs
What is short selling?
What is a Bond?
What is an Option?
What is the Combined Score?
What is the Engagement Score?
Sharpe Ratio Challenge
Market Basics Challenge
How do I measure performance?
What portfolio analytics are available?
How do I compare my portfolio to the benchmark?
What is Volatility?
What is Return?
What is Sharpe Ratio?
How to Improve Sharpe Ratio
How do I measure risk?
What are average excess returns?
What is a good Sharpe Ratio?
Financial Markets Simulation
I can't access my EquitySim account
How to Trade
How-to: Company Pages
How to: Discovery
How-to: Portfolio Holdings
How to: Activity
How to: Leaderboard
How to: Performance
How to: Challenges
Preparing for recruitment
How to: use EquitySim to improve your recruitment potential
Showcasing your work on EquitySim
Designing a stand-out resume
Preparing for the S+T interview
STAR Structure for Behavioural Interview Questions
Interview Prep: Tell me about yourself
Interview Prep: Pitch me an Investment Idea
Interview Practice - Partner Exercise
Interview Prep: What to wear
Case Study: 2019 Credit-Suisse Results
2022 Financial Markets Campus Recruitment Insights
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- How are Options priced in the simulation?
How are Options priced in the simulation?
Most options are highly volatile and face liquidity issues (not enough people are trading them to create a stable price). This holds true in the real world and is further exponentiated in the simulation.
Options are a unique asset that worthwhile learning (especially through simulation, as it is very easy to make mistakes with options). However, if you are in a challenge looking to maximize your rank, options are a major wild card and are very difficult to predict (especially in our simulation).
Remember: How are trades executed in the simulation?
Tesla Option Example:
Buy / Cover-short orders are placed at the BID (In this example the BID is: $599.65)
Sell / Short orders are placed at the ASK (In this example the ASK is: $615.05)
Estimated returns (profit /losses) are calculated based on the "Last Traded Price," in the real world (in this example the "Last Traded Real-world Price": $435.05.
What this means is if you placed a market order to buy these Tesla options, you would purchase it at $615.05. However, when they show up in your portfolio they would technically be worth: $435.05, creating a fairly large loss. This is a liquidity problem, meaning that though clearly, the option is worth more than the last price, no one has purchased it recently to re-value the option.
Con: Your option value in the simulation is at the mercy of the "last traded real-world price."
Pro: Options are highly volatile, which means even if you take a disproportionate loss to purchase the option now, these tides can turn very quickly in a matter of days (sometimes even hours).
Remember these are problems one would also face in the real world, just further exponentiated by the simulation.