The Bot Island Stock Market Game

[sarahlackey]

We're on a tropical island Bot Island (name negotiable), and there are a bunch of companies located here (eg resort company, umbrella company, surfing company, coconut company, etc). Our goal is to make as much money as we can so we can buy cool stuff from the Bot Island Store! What the lesson will be:

• Give an overview of what a stock is, and how stocks work (how they're like owning a part of a company, and that each slice of the company is worth a certain amount, and that we get paid for every quarter/year - whatever is simplest - we own the stock). Companies with stock will be listed in an Index, and ours is called the B&B Index.
• Introduce Bot Island, and how we all moved here in order to get rich and buy the cool Bot Island stuff
• Give each student 100 "BotCash", which will be what they trade in for stocks. Students can refrain from buying any stocks and just keep their money with them, or they can spend it at the Bot Island Store (which will be things like cool pencils, erasers, pencil sharpeners, cute little rewards for the students)
• (Maybe?) Instructors can have 100 BotCash, and each instructor can demonstrate what happens when you 1) put all your money in one stock, 2) equally split your money among all the companies, or 3) spend/save and not participate in the market
• Every "round" will be an event that happens in the B&B Index. We can first start out with simple events, like having a sunny day on the Tropical Island (AKA stock prices of the resort companies go up, prices of the umbrella company go down, etc). Gradually they will get more complicated, like a storm that brings heavy rain or a shark sighting just off the coast, and at some point we can simulate a "crash" and eventual return to normal
• We finally end in retirement, and everyone cashes in their stocks and gets to buy things from the store with whatever remaining money they have left.
• IMPORTANT NOTE: The market should be simulated such that anyone who equally divides their money between all the stocks ends up doing relatively well compared to someone selling and trading
• Question: Should we incorporate commissions on stocks? For example, should we charge 5 BotCash for every buy or sell?

At the end:

• Review how students fared with their stocks, and how the instructors ended up too
• See what kinds of strategies students used
• See if we can come to an agreement about what the best strategy was
• Give the students facts about what the best kind of strategy is, and why compound interest is so important (maybe demonstrate with a compounding calculator

Students will learn:

• What stocks are
• How compound interest works
• How real-life events affect how much a company is worth (and thus how much a stock is worth)
• The best ways to manage stocks (diversifying their stock choices, putting all their eggs in one basket, not participating in the stock market at all)
• The value of saving and putting money to good use

[sarahlackey]

Question I encountered while writing this lesson plan: should we include balance sheets for students to look into? Or would that be too complicated for students to understand?