The Three Minute Guide to Markets

What Have I Gotten Myself Into?

Perhaps you're an established and experienced trader on exchanges spanning all 24 time-zones, shifting investments even in the most tumultuous economic climates with a steely eye, and a flick of the mouse.  But in the event that you're not, this guide is for you, and assumes you've arrived here by accident (at worst) or that you've little knowledge about how a stock market works, much less what ExtZy has to do with it!

The good news is that you don't need to know much of anything about stock markets, international finance, swaps, bonds, derivatives, or futures in order to play the game (or write and program it, frankly!); the bad news is that you will have to learn something about it to play it well, but the learning can actually be kinda fun.  Let's start with some basic definitions:

Market - A space where things are bought, sold, and traded between people;

Entity - Something that a) has a clear volume and substance (like an apple), and b) can be owned (unlike air, or something abstract, like anger);

Stock - A stand-in for an entity in a market (so someone doesn't have to bring all their apples to Wall Street);

Share -  One piece of a stock, that represents a slice (since we're talking apples) of that entity's value.

That's the basics!  Everyone knows that apples are tasty, and healthy, so they have value (both nutritional, and cost something in the (super-)market).  Instead of dragging bushels and bushels along, the farmer lists his apples as a stock, which people can buy - not to eat apples, but to give the famer more resources to plant and sell them, growing his business.

OK, so say you went to the market, saw a stock of apples, thought to yourself "Hey, I think more people will be buying those than they are now", and decided to invest some money, buying shares in that company.  What happens next?  Well, three things can happen, basically:

Good news - The apple farmer takes the investment he's received from the market, plants new trees, buys a new harvester, and opens a new fruit stand in a different city that really likes apples.  The company profits, the farmer keeps some, and gives some back to the people who bought (and 'hold) shares, paying them what are called dividends;

Bad news -  The apple farmer takes the investment he's received from the market, plants new trees that die, breaks his arm climbing onto the new harvester and now can't drive it, and opens a new fruit stand in a different city that really likes cabbage.  The company loses money, the farmer has to break open his piggy-bank to pay the rent, and share-holders get nothing right now;

No news - The farmer takes the investment he's received from the market, plants new trees, buys a new harvester, and opens a new fruit stand in a different city that only sortof likes apples.  The company doesn't lose money that year, but it doesn't make it either, so the famer hopes next season is better, tries to come up with a better plan to sell apples, and share-holders get nothing right now.

No company makes a profit all the time, but you sure hope that the ones do that you invest in!  If they do, you're going to get something back for giving them your money, and it will be given to you according to the rules of the market that you used.  Some of the common rules define how often companies are measured for profits and dividends are paid.  Other rules say how much of a stock has to be sold before it will start paying dividends, or to how many different people (so one person can't buy it all up.)  Finally, still other rules prevent people from manipulating the market, misrepresenting their stocks, or the health of their company.

So you've bought your shares in the farmer's apples, you understand the rules, and once in a while, he makes a profit and you get a nice check with your dividends - if you're smart and lucky, eventually you get paid back more than you invested in the meantime, and you start making a profit.  Life is good - and now you want more.  You can do three things:

Invest more - If there are any shares of the apple farmer's company left on the market, you can buy more of them, increasing the number you have (your portfolio) and earning more dividends each time they pay out;

Find new value - You've got a good head for this obviously, maybe there are other stocks out there that will do well, and earn you dividends for your investments in them - start looking around, think about what's happening in the market (or world) that will make another company (remember the cabbage!) more valuable, and buy shares;

Sell off - Perhaps you think the apple farmer has gotten as profitable as he can, or that the wet winter your grandmother swears is coming will unleash a swarm of Mongolian Apple Beetles, destroying next year's crop.  So you make an offer in the market to sell your shares - hopefully (since you're smart) at a higher price than you bought them, but not higher than what people will pay for them.  Someone buys them (who's grandmother isn't so knowledgeable), and you make money.

Apples on ExtZy

So what does this all mean now that you've stumbled on this game?  ExtZy is a market, and web-sites are the entities.  You can search for topics in the game that have hidden value, or that interest you, or that you think are important (try "Bees" or "Solar"), and buy shares in those stocks.

Once a week, if the stock has enough shareholders (feel free to read the rules!), and more people visit it than the week before (in other words, it becomes more popular), then the game's engine will pay out dividends - points that players can use to buy more stocks that are performing well, or buy other stocks that they think will rise in 'value'.

When you've established a portfolio, are making profits, and want to invest more, you can place offers to sell some of your successful shares (or unsuccessful ones if you don't think they'll ever make money) and try to find other buyers in the game to pick them up.

Finally, you can also trade your points in profit for real prizes, ranging from fun Z/Yen dice and chopsticks to a voucher for an electronics store worth an iPod Touch!

Please also see "The One Minute Guide to ExtZy", "Game Rules", "Terms and Conditions" and the detailed "ExtZy Help Files" for more information on how to play.