Trading on Wall Street Survivor’s stock simulator isn’t limited to your regular buying and selling of shares. You can also practice your skills in options trading.
Today we’ve released an update on Wall Street Survivor to make it easier than ever to practice trading options.
What is an Option?
Well, here’s the textbook definition…
Option contracts give you an option to buy or sell something of monetary value…in our case, stocks. A call option gives you the option of buying something, whereas a put option gives you the right to sell something.
Options Trading Simulator on WSS
If the League your in doesn’t allow for options trading, you’ll see this:
If the League does allow for options trading, you’ll arrive at this page:
WSS has automated the exercising of your options contracts.
This means that when your options contract reaches its expiry date and your options are…
In-the-money: Wall Street Survivor will automatically exercise your contracts and fill your portfolio.
Out-of-the-money: Your contracts will expire with no changes made to your portfolio.
Here’s an Example using WSS Options Trading Simulator:
You buy 3 call options contracts (1 contract = 100 shares) of NFLX at strike price of $300. The contracts expire in 1 month.
Situation #1: A month passes, and on the set expiration date NFLX is trading at $350. This means you are in-the-money, so the options will be exercised. Your portfolio will automatically be filled with 300 shares of NFLX at $300 per share.
Situation #2: On the expiration date, NFLX stock price is at $250. This means you are out-of-the-money, so the options won’t be exercised. Your contracts will expire and no changes will be made to your portfolio.
Options contracts expire every week on Friday, and your account will be updated end of day each Friday.