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Online Revolution Brings Wall Street to Main Street

5 mins
Updated by Shilpa Lama
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Fantasy trading contests let everyone try their hand at the market from the comfort of home without an upfront investment

The idea of buying and selling stocks is an appealing one to many people. We’ve all heard stories or read reports of overnight successes making millionaires out of average Joes. However, the idea of dipping a toe into the market is also one that conjures images of poor schmucks who lost it all on a bad investment or unlucky turn of events.

Well, thanks to the recent trend of fantasy trading contests—like StockBattle or SuperStox—anyone can try their hand at predicting the ups and downs of the market without any of the actual risks.

What are fantasy trading contests?

Fantasy trading contests are a new variety of fantasy gaming that is following in the well-established footsteps of fantasy sports. Just like in a fantasy baseball league, you choose your “players” (stocks) and see how well they perform in a series of “matches” (pre-set timeframes on the actual stock market).

Users can select up to five different stocks (or cryptocurrencies) to add to their virtual portfolio. Based on how those fantasy stocks or fantasy cryptocurrency selections perform in the real world, players are awarded points at the end of each match.

Players of fantasy finance contests compete using real-time data taken from NASDAQ to evaluate the performance of their virtual portfolios. Each game lasts anywhere from 15 – 60 minutes and points are awarded as soon as the game is finished. 

How is fantasy finance different from the stock market?

They say that users have to spend money to make money, and in the case of stocks, that’s true. No matter how much a user’s stock climbs, the rewards will be limited by how much you put in. A 100% return on an investment is a truly rare feat, but if you only put in $10, well, you only earned $10. The stock market is an investment. You buy something from a company or individual that you hope will increase in value. Maybe it will, or maybe you’ll lose it all. Who knows?

Fantasy trading contests, though, are a different beast entirely. When you buy a stock, you own that stock. It is yours to hold on to and if the value drops, there’s little to nothing you can do aside from either waiting or just biting the bullet and cutting your losses. However, in fantasy trading, you are just predicting the outcome of stock or currencies that you don’t own. 

This might seem like a small difference, but it’s bigger than you might think. If you make a bad choice on the stock market, you’re just out of luck. But having a bad game of fantasy finance just means that you don’t win anything. No harm, no foul.

Can I make money on fantasy trading games?

Yes, you can make money by playing fantasy finance. Unlike in the stock market, where your gains are slowly doled out over time (barring some serious market upheaval), Fantasy trading contests like StockBattle, SuperStox, or Wealthbase payout to their winners at the end of every match. Fantasy finance lets players try trading strategies that they might not feel comfortable trying in the real world. It’s a great way to gain confidence and experience without actually risking your money while still presenting a chance to turn a profit.

How should I choose fantasy stocks?

The best method for choosing stocks is a mystery that has plagued investors for as long as there have been stocks to buy. While some investors, like Warren Buffett, advise against buying stocks at all — instead of focusing on low-yield Treasury bonds and stable index funds—this is a very long-term strategy that is unlikely to pay off in a “reasonable” timeframe.

So, what sorts of things should you keep in mind when choosing fantasy stocks? Well, here’s our list of the best tips:

1. Know your timeline

Buy a stock as a long-term investment. The most successful traders typically have investments that pay dividends for years or decades. If you’re planning for retirement, this is probably your best bet. But if you’re reading this, then you’re probably more interested in the short term. Fantasy contests typically last either 15, 30, or 60 minutes. A far cry from the 2-12 months that many stocks see the best results in.

This means that you should be looking for stocks that are having a hot day or week. Maybe they just announced a big new merger or a hot new product launch. If a company has been rising all day, and there’s nothing about them in the news, it’s probably a safe bet for the next hour.

2. Learn from the past

No company’s stock rises every day. Even the top companies in the world have losing days or weeks. This could be a result of anything from natural market forces to a supplier down the line missing a delivery date. 

The chart below shows a bit of Apple’s history over the last five years. While the value of the stock has consistently risen, it has only had positive trading days a little over half the time and hasn’t ever had more than 9 straight days of growth. 

Apple, Inc. Stock Trends 2016-2021Statistics1
Average Daily Price Increase0.78%
Average Daily Price Decrease-0.74%
Total Stock Up Days683
Total Stock Down Days572
Up Days %54.42%
Longest Uptrend (Days)9.00
Longest Downtrend (Days)8.00

3. Try to pick a “AAA” stock

By this, we don’t necessarily mean a “blue chip” stock. This doesn’t need to be a huge company, or even a particularly valuable stock. The three “A”s stand for Affordability, Accessibility, and Acceleration.

  • Affordability: What’s the price of the stock? Can you afford it? What kinds of growth will it require to turn a profit? Sure, that Apple stock will likely grow, but how much will your one share actually appreciate in value?
  • Accessibility: Are there shares available? How many are currently held versus how many are available? If there’s a huge amount of unsold stock, this could be a red flag. Or a golden opportunity to corner the market.
  • Acceleration: Growth is great. But rapid growth is better. If a stock has been gaining more and more every day, it might be worth looking into. Careful though, as rapid growth is rarely sustainable in the long term.

Try it yourself

Experience is the best teacher. All the theory and research in the world pales in comparison to just rolling up your sleeves and getting to it. Most fantasy trading contests are free to get started. Maybe you’ll find a new passion or a new skill you’d never considered. So jump in and win yourself some extra cash.

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