UBC-ESM

The UBC Election Stock Market
for the 1997 Canadian Federal Election
WWW INTERFACE
TRADING MECHANICS

Faculty of Commerce and Business Administration
University of British Columbia

May 2, 1997

© Copyright 1997 by Thomas Ross and Werner Antweiler. All rights reserved.


Table of Contents

  1. Logging in and out
  2. Main Menu
  3. Market Activity
    1. Market Page
    2. Trading Menu
  4. Other Functions
    1. Portfolio Valuation
    2. Liquidation Statement
    3. Your Open Orders
    4. Your Trading History
    5. Markets Overview
    6. Market History
    7. Investor Statistics
  5. Other Information for Traders from the UBC-ESM Home Page
  6. Appendix A: Glossary
Back to Trader's Manual Table of Contents


The UBC-ESM operates on a computer in the Faculty of Commerce and Business Administration at the University of British Columbia. Access to the market is through the Internet at the address:
            http://esm.ubc.ca/
This is the UBC-ESM HOME PAGE. To connect to the market and obtain access to a trading account, click on the "Connect to the Market" button on this page and then submit the id and password information as requested. After logging in you will see the Main Menu, illustrated in Figure 1, which provides access to the Trader Menus in all three markets as well as to Other Functions.


Logging in and out

To log in, you need a user name and a password. On the login page, enter your login name and password in the corresponding fields and click on the LOGIN button. You will then see the main menu and a welcome message. User names and passwords are assigned by the market administrator. Keep your user name and password secret and follow our safety guidelines explained below.

Changing your Password / Forgotten Passwords
For security reasons, passwords can only be changed or looked up by the market administrator. After the initial assignment, you can request a change of your password, or find out about a forgotten password, by contacting the market administrator.

Logging Out
When you are finished with your trading session, please log out from the market. This makes sure that your session authorization is expired immediately and cannot be used by an unauthorized person. However, the WWW pages in the cache of your browser may still be viewed after you have logged out. If you are using a publicly accessible WWW terminal, you must shut down your browser after you have logged out to erase the WWW pages. The UBC-ESM stock market assumes no responsibility whatsoever for misuse of trading privileges by unauthorized users if these safety precautions have not been followed.

Security
User names and passwords are set up to provide efficient protection of your trader account. You can opt for an additional layer of protection by restricting access to your trader account from a registered Internet address (e.g., "esm.ubc.ca", the single computer identified by that name), or from an Internet domain (e.g., ".ubc.ca", all computers at the University of British Columbia). The combination of user name, password, and Internet address provides very good security. Remind, though, that security is never 100%, and that even good computer systems are not completely safe from attacks by sophisticated computer experts.

Back to Table of Contents


MAIN MENU

To begin trading first select one of the three markets by pointing at clicking on the name of the market. The discussion that follows will use the Seats Market as an example, but the procedures are identical across markets.

Figure 1
UBC Election Stock Market
MAIN MENU

User: Jane Doe
Session expires at 19:03 / 29 min. remaining
Trader Menus
Seats Market
Popular Vote Market
Majority Government Market
Other Functions
Your Open Orders
Your Trading History
Portfolio Valuation
Trading History
Liquidation Statement
Market History
Markets Overview
Investor Statistics
Log out from UBC-ESM

Back to Table of Contents


Market Activity

After you select a market you will be presented with a split screen which appears as in Figure 2. The top part of the screen contains the Market Table identifying the contracts, for all the contracts offered in the market the number of shares you hold currently, the current highest bid, the current lowest ask and the last price at which the contract was traded. The bottom row of the table reveals how much money is left in your cash account. The last column on the table provides links to data on market history. If a listed bid or ask is yours it will appear in red. To highlight arbitrage opportunities, If all bids listed for all contracts sum to more than $1 the heading on the bid column will flash. If the sum of the asks is less than $1, the heading on the ask column will flash.

Technical Notes: The market page and trader page are displayed in two separate frames. The appearance may differ on different types of screens, and users may have to adjust the frames and or the WWW browser. First, you can shift the bar separating the two frames up or down by clicking and pulling the bar. Netscape users can increase the size of the usable window by shutting down the tool bar, location, and directory bar. Go into Netscape's Options menu and click on the aforementioned items so that the red checkmark disappears. If this does not suffice to display both frames simultaneously, you can request the "small screen" version of our trader interface. Contact the market administrator for more information.

Back to Table of Contents


Market Page

Figure 2
Canadian 1997 Federal Election / Seats Market (CA97S)
Contract Shares Bid ¢ Ask ¢ Last ¢ Market
History

 
Market
Chart

 
LIB Liberal Party 87 55.2 58.0 55.3
BQ Bloc Quebecois 39 13.7 14.4 13.6
REF Reform Party 45 14.1 15.2 14.1
NDP New Democrats 7 5.7 7.0 6.8
PC Progr. Conserv. 158 8.5 10.0 10.0
OT All Other Parties 230 0.5 0.8 0.5
Cash Balance $23.48 02-May-97 17:39:18

The columns in the market table are explained below:

Contract
The symbol of the contract. Together with the market symbol displayed in the maroon-colored line at the top of the table, this forms the stock symbol (e.g., CA97S.LIB)
Name
The name of the contract: the name of a political party or a particular election outcome.
Shares
The number of shares currently held in the trader's portfolio.
Bid
The price of the highest bid in the bid queue. If the bid queue is empty, the field will be empty. If the sum of bid prices of all contracts exceeds $1.000 (a market inconsistency), the "Bid" header will be flashing. When a bid is your own the price will appear in red, indicating that it is not allowed to trade with oneself.
Ask
The price of the lowest ask in the ask queue. If the bid queue is empty, the field will be empty. If the sum of ask prices of all contracts falls below $1.000 (a market inconsistency), the "Ask" header will be flashing. When an ask is your own the price will appear in red, indicating that it is not allowed to trade with oneself.
Last
The price at which the contract was last traded.

Back to Table of Contents


Trading Menu

The bottom part of the screen contains the TRADING MENU. It is with this table that you can place bids and asks, and make purchases and sales.

Figure 3
TRADING MENU for bids and asks
ActionContractQuantity Click to execute PriceExpiry

¢d

Buying Contracts
If you wish to accept a current offer to sell (accept an "ask") you can make your purchase by following a few simple steps. First click on the Action arrow to reveal all the alternative actions (Buy, Sell, Bid, Ask) and then click on Buy. Then click on the Contract arrow to reveal the set of contracts available and select the contract you wish to purchase (e.g. LIB). In the Quantity field enter the number of contracts you wish to buy. If all this information has been correctly entered, click on the TRADE button. You will be asked to confirm your order. If it is correct click on EXECUTE and your transaction will be completed. Please note that if there are not as many contracts available for sale at the current asking price as you wanted to purchase, the market will only transfer to you the number available at the current asking price. A new, higher, Ask price will appear and you will have to decide if you wish to make any further purchases at this higher price.

Buying Unit Portfolios
A unit portfolio is a bundle of contracts, one of each type offered in a market. For example, in the Seats Market a unit portfolio consists of one contract each of CA97S.BQ, CA97S.LIB, CA97S.NDP, CA97S.PC, CA97S.REF, and CA97S.OT. Unit portfolios cost $1 each and would be worth exactly that if held to the end of the market as the fractions of seats won all parties together must sum to 100. Most new traders begin their trading activity by purchasing a number of unit portfolios in each market. To do this, proceed exactly as just explained except that the contract selected is the Unit Portfolio, identified as 1$. If you select this contract and choose, for example, a quantity of 10, you will receive 10 of each contract available in this market and your cash account will be reduced by $10. The UBC-ESM will sell unit portfolios at any time the market is open, and each will always cost $1.

Selling contracts
If you wish to accept a current offer to buy (accept an "bid") you can make your sale by following these simple steps. First click on the Action arrow to reveal all the alternative actions (Buy, Sell, Bid, Ask) and then click on Sell. Then click on the Contract arrow to reveal the set of contracts available and select the contract you wish to sell (e.g. PC). In the Quantity field enter the number of contracts you wish to sell. If all this information has been correctly entered, click on the TRADE button. You will be asked to confirm your order. If it is correct click on EXECUTE and your transaction will be completed. Please note that if buyers do not want as many contracts at the current bid price as you wanted to sell, the market will only transfer from you the number available at the current bid price. A new, lower, Bid price will appear and you will have to decide if you wish to make any further sales at this lower price.

Selling Unit Portfolios
If you wish to sell unit portfolios back to the UBC-ESM, this can be done any time the market is open. The price of a unit portfolio will always be $1. To do this, proceed exactly as just explained except that the contract selected is the Unit Portfolio, identified as 1$. If you select this contract and choose, for example, a quantity of 7, you will surrender 7 of each contract and your $7 will be added to your cash account.

Placing an Offer to Buy (i.e. a " Bid")
If you wish to place an offer to buy (make a "bid") you can do so by following these simple steps. First click on the Action arrow to reveal all the alternative actions (Buy, Sell, Bid, Ask) and then click on Bid. Then click on the Contract arrow to reveal the set of contracts available and select the contract on which you wish to place the bid (e.g. REF). In the Quantity field enter the number of contracts you wish to bid for. In the Price field enter the price (in cents, e.g. "50" for a bid of 50¢) you are offering to pay. Then in the Expiry field enter the number of days you wish to have your offer left in the system. (You can cancel outstanding offers that have not yet been accepted at any time.) If all this information has been correctly entered, click on the TRADE button. You will be asked to confirm your order. If it is correct, click on EXECUTE and your transaction will be completed. If your bid is the highest in the queue the bid price will appear in red on your Market Table.

Placing an Offer to Buy at a Price at or Higher than the Current Ask
If you place a bid at a price equal to the current ask for that contract, the system will automatically transfer the number of shares you wished to purchase at that price and the transaction will be complete. However, if there are not enough shares available for sale at the price you specified, it will transfer the number that are available and leave the remainder of your order in the bid queue.
        If you place a bid at a price higher than the current ask, the system will transfer contracts to you from the ask queue until either your order is complete or the ask price has risen above the price you bid. Consider an example. Suppose there are three traders with outstanding ask orders sell LIB contracts. One is offering 10 shares at 40¢, the second 5 shares at 42¢ and the third 20 shares at 50¢. If you were to place a bid order for 20 shares at 45¢, you will immediately be given the 10 shares from the first seller (at the ask price of 40¢) and the 5 shares from the second seller (at that price of 42¢). Since the ask price for the remaining seller is above your bid price, the rest of your order remains unfilled and remains in the system until it expires, you cancel it or it is accepted by a seller.

Placing an Offer to Sell (i.e. an "Ask")
If you wish to place an offer to sell (make a "ask") you can do so by following these simple steps. First click on the Action arrow to reveal all the alternative actions (Buy, Sell, Bid, Ask) and then click on Ask. Then click on the Contract arrow to reveal the set of contracts available and select the contract on which you wish to place the ask (e.g. BQ). In the Quantity field enter the number of contracts you wish to offer for sale. In the Price field enter the price (in cents, e.g. "50" for a bid of 50¢) you are offering to sell them for. Then, in the Expiry field enter the number of days you wish to have your offer left in the system. (You can cancel outstanding offers that have not yet been accepted at any time.) If all this information has been correctly entered, click on the TRADE button. You will be asked to confirm your order. If it is correct, click on EXECUTE and your transaction will be completed. If your ask is the lowest in the queue the ask price will appear in red on your Market Table.

Placing an Offer to Sell at a Price at or Below the Current Bid
If you place an ask at a price equal to the current bid for that contract, the system will automatically transfer the number of shares you wished to sell at that price and the transaction will be complete. However, if buyers did not want as many shares at that price as you wished to sell, it will transfer the number that buyers requested at that price and leave the remainder of your order in the ask queue.
        If you place an ask at a price lower than the current bid, the system will transfer contracts from you to the bid queue until either your order is complete or the bid price has fallen below the price you specified. Consider an example. Suppose there are three traders with outstanding bid orders for NDP contracts. One is offering to buy 10 shares at 30¢, the second 5 shares at 26¢ and the third 20 shares at 22¢. If you were to place an ask order for 20 shares at 25¢, you will immediately sell 10 contracts to the first buyer (at the bid price of 30¢) and the 5 shares from the second buyer (at that price of 26¢). Since the bid price for the remaining buyer is below your ask price, the rest of your order remains unfilled and remains in the system until it expires, you cancel it or it is accepted by a buyer.

Canceling Outstanding Orders to Buy and Sell
You can always check on your outstanding offers to buy and sell by clicking on the "Your Open Orders" line on the MAIN MENU. From this screen you can see what orders you do have and when they will expire. You can also cancel any outstanding orders from this screen

Back to Table of Contents


OTHER FUNCTIONS

Back to Table of Contents

Your Open Orders

Clicking on this line will take you to a table reporting your outstanding bid and asks orders. From this page you can cancel orders as well by simply clicking on the word "Cancel" in the line describing the order you wish canceled.

Back to Table of Contents

Portfolio Valuation

Clicking here gives you a table that provides three different ways of estimating the value of your current portfolio: based upon the last price at which each contract traded, based upon the current bid price, and based upon the current ask price.

Back to Table of Contents

Liquidation Statement

After the election you can click here to get a table showing how the UBC-ESM calculated the final value of your portfolio. Unofficial results will be posted immediately after the election but the official final values will be determined from the return of the writs, which is typically about two weeks after the election. The column headed "Price" will be filled with these final prices and that headed "Value" will indicate the total value (price multiplied by quantity) of your holdings of each contract.

Back to Table of Contents

Trading History

Clicking here gives you access to the full details of your trading history. To find these data first click on the Markets arrow and select the market from which you would like to see data (or select "All"). Then click on the Transactions arrow and select which kinds of transactions you want information on, for example bids, asks, purchases, sales or all. Click on the Period arrow and select the period over which you want the data collected. If all these entries are correct, clicking on OBTAIN will produce a table with the requested data. See figure 4 below.
Figure 4
SELECT TRADING HISTORY
MarketsTransactionsPeriod Click to execute

Back to Table of Contents

Markets Overview

Clicking here will produce a table with current data on all contracts in all three markets: last price, change between second last and last price, current bid, current ask, highest price traded today, lowest price traded today and the volume traded today. This page is also accessible from the UBC-ESM front page and is provided as a public service to non-traders. It is updated on request, and thus displays the current state of the market at the time of your request.

Back to Table of Contents

Market History

Clicking here will produce graphs giving the history of prices in each market. Yesterday's low, high, closing price and volume are reported along with the low, high, average price and volume for the last 7 days. This information is updated each evening when the market is shut down. This page is also accessible from the UBC-ESM front page and is provided as a public service to non-traders.

Back to Table of Contents

Investor Statistics

Clicking here will give you information about the size of the market: the number of traders, total investment and average investment per trader. This information is updated each evening when the market is shut down. This page is also accessible from the UBC-ESM front page and is provided as a public service to non-traders.

Back to Table of Contents


Other Information for Traders from the UBC-ESM Home Page

From the UBC-ESM HOME PAGE, traders (and others) can access some additional information that might be of interest.
Current Market Prices
Provides a large table with current prices, bids and asks of all contracts in all markets. It also provides data on the highest and lowest prices each contract has traded at that day and the volume (i.e. number of contracts) traded to that point in the day.

Recent Polls
Provides data on recent, publically available polls.

Election Forecasting
This is a model that some traders might wish to use to predict how changing vote shares will translate into changing shares of seats in the House of Commons. Instructions are provided on this page, but traders should recognize that this model is provided merely as an example of one way to think about the link between popular votes and seats. It may or may not be accurate in any given election. Please note that the recent changes to the number and boundaries of electoral districts makes strict application of this model particularly problematic in this election.

Back to Table of Contents