Trading and Information
SourcesSteve CondonCraig Ganger
The Stock Market Class Winter 2003
Trading
The Stock Market Class
The Trading Procedure The Analyst (student) has an idea to buy/sell The Analyst convinces the Portfolio Manager (class)
to take action The PM tells the internal trader (GA) to buy/sell The internal trader calls a broker with the order The broker calls the commission broker on the
exchange The commission broker goes to the specialist who
completes the deal Confirmation of the order takes place in reverse
Behind the Scenes Buy/sell order from client Broker executes trade Broker informs Deposit Trust Corporation
(DTC) about trade DTC informs State Street Bank (custodian)
to transfer shares/cash to the DTC Shares/cash are transferred to DTC within
T+3 business days DTC transfers shares/cash
What Broker to Use? Cost
Quality of Service & Execution
Quality of Research
Availability of Resources Soft dollars
Relationships are key
Trading Costs
Actual Cost % Cost
Commission 6 cents/sh 12 bps
Market Impact 9 cents/sh 20 bps
Delay Costs 24 cents/sh 53 bps
Missed Trades 8 cents/sh 16 bps
Total 47 cents/sh 1.01%
* Plexus estimates of one-way trade involving a large-cap stock
Who Do We Trade Through?
Our Broker List
Prudential Securities (5 cents/share)
Salomon Smith Barney (6 cents/share)
A G Edwards and Associates (6 cents/share)
Voyager Institutional Sales (6 cents/share)
Types of Orders
Market
Order is executed immediately
Execution of order is time-sensitive
Types of Orders Limit
Limit-buy order Stop-buy order
Limit-sell orderStop-loss orderSell
Buy
Price below the limit
Price above the limit
Condition
Acti
on
Information Sources
The Stock Market Class
Bureau of Economic Analysis www.bea.doc.gov
Bureau of Labor Statistics http://stats.bls.gov
Federal Reserve Board www.federalreserve.gov
Research – Economic Data
Research – General News WSJ [www.wsj.com]
News, need online account for full access
CNN [money.cnn.com] News, stock data, data for many markets
Bloomberg [www.bloomberg.com] News, number of markets covered
CBS [cbs.marketwatch.com] News, basic data
Financial Times [news.ft.com] Local and global news stories
Research – Company Data Yahoo [finance.yahoo.com]
Historical quotes, basic stock data, news, charts
Hoovers [www.hoovers.com] Company capsule, competitors, news, executives
MSN [moneycentral.msn.com] Real-time quotes, news, up/down-grades
BigCharts [www.bigcharts.com] Pretty Charts
Quicken [www.quicken.com] Competitor Comparisons, Portfolio Tracking/Analysis
Research – Annual Reports Company Websites
For pretty annual reports available to investors
Edgar Online [www.edgar-online.com] Go to [www.freeedgar.com] for free registration (10 docs/month) Access to 10Ks and other company filings [http://edgarscan.pwcglobal.com]
Improved site w/ excel-download capability
Report Gallery [www.reportgallery.com] Includes domestic and international reports
Username PasswordAG Edwardswww.agedwards.com SIM SIMP1X
Bear Stearns www.bearstearns.com SIMS SIM3545
Merrill Lynch www.mlx.ml.com kspellman SIMP1X
Prudential www.cm1.prusec.com SIM SIM
Salomon Smith Barney www.salomonsmithbarney.com SIMOSU SIMOSU
UBS Warburg www.ubswarburg.com simp simpxxxx
Research – Analyst Reports
Other Useful Investment Sites Standard and Poors [www.spglobal.com]
Benchmark information CFA exam stuff [www.aimr.org] Morningstar [www.morningstar.com]
Lots of mutual fund & stock analysis Fisher library access to Investext Plus
[http://fisher.osu.edu/library/databases/online.htm] Access to sell-side research reports
The Street [www.thestreet.com] Lots of commentary, analyst info
Stock Tips [www.marthastewart.com]
The Stock Market Class Portfolio Yahoo! Finance
http://finance.yahoo.com Sign in
Yahoo! ID Password
Click on portfolio name
Updating done by GA
Fisher Resources – Bloomberg Good for detailed news and information on
many different types of securities Colorful keyboard
Use top row of keys to go to primary menus Ex: equities, money mkt, govt, munis, commodities
Uses menu system with either mouse or number + enter
Lots of real-time data News, quotes, earnings estimates, filings
Fisher Resources – Datastream Lots of historical data on almost anything Especially useful with international
companies Download many different data types for
many different securities Ex: monthly price data for 30,000 equities
Use macro w/ DS code to download data into comma-separated file
Fisher Resources – First Call Real-time news provider
Gives analysts reports, research broadcasts, etc.
Use top row of buttons for quick access Ex: F1 – F10
Fisher Resources – Bridge Good for real-time news and data
Lots of real-time data
Colorful screen interface
Fisher Resources – StockVal Good for historical data & ratios
Add-in w/ excel makes analysis easier
Uses a lot of tabs, buttons, etc. so wonder around with mouse
Can create portfolios Multiple equity analysis at same time