Your Questions About Investopedia

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Richard asks…

How do I win my class Investopedia contest using real time quotes vs. the delayed quotes on the website?

We have a class project using the Investopedia simulator. The Investopedia simulator says it has a 20 minute delay, and I have a real brokerage account so I have real-time quotes. Investopedia randomly fills orders within a 20 minute period, correct? Or is there a way to beat this delay with real time quotes to make a lot of money in between trades?

Basically, the question is – How do I beat the Investopedia system?

Justin answers:

In other words, how to cheat?
This is an example of arbitrage.
Did you ever see the movie “The Sting”? I think the gimmick was the same sort of thing.
What you would do is follow several markets or stocks with your real time quotes. Momentum stocks would work particularly well–the recent ones being stocks like GOOG and RIMM and AAPL. You’d note which ones moved from say 1000 eastern to 1020. If GOOG moved up say .25, you’d buy GOOG at 1020 with Investpedia, getting the 1000 price. I’m assuming tho that you get an immediate fill, the price at 1000. I’m also assuming you can “win” by such short term daytrading. You only have an edge for such–there’s no overnight benefit. Essentially you’re only going to hold for 20 minutes, because that’s the only “back to the future” you have a gimmick to exploit.
Daytraders do this all the time, so it’s actually a practical test of your skills.
But note too that these stocks may have topped out in the past few days. We may be in a new market. Can you short?
Do further add to the possibilities of momentum, you’d execute your trade around the release of an important statistic, or a movement by the Fed. Next meeting is Dec 11 I believe. The market always gyrates after Fed meetings. You could make a killing in just one twenty minute period. Gov employment stats are also “market moving.”

Thomas asks…

How often does investopedia simulator pay dividends?

I’m currently using the simulator on investopedia. But I only have $28,568.88 CASH, $64,581.83 BUYING POWER and $100,594.78 ACCOUNT VALUE.
So when does investopedia pay virtual money?

Thanks

Justin answers:

Been playing silly buggers on Investopedia since 2008 and never once have i received a single dividend from some blue chips i still hold….

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