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Make your market!

Show your talent of market maker!

This contest is closed.

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Presentation of the contest Make your market!   CONC_EPZ7_US_V5_ESSEC_BBA_2017_09

Practical information

The contest Make your market! is open to all participants in the certificate. It is anonymous and the participation is free.

The contest is based on the simulation Make your market!, which allows you to show your talent of market maker to animate the market.

Invest 10 minutes of your time (duration of the contest simulation) to become the best SimTrader!

The ranking of SimTraders is based on SimTraders' trading performance in the contest simulation.

Important note: you can always improve your ranking by launching again the contest simulation. The maximum number of launches is set at 20 for this contest.

The contest is open from Wednesday 1 November 2017 to Thursday 30 November 2017 midnight.

Grading

Your grade for this contest takes into account the following elements:

  • Your participation to the contest by launching the simulation upto 100% (10 points of participation)

  • Your ranking based on your trading performance during the simulation (between 0 and 90 points according to your place in the ranking).

Simulation of the contest Make your market!   ASMB_CONC_EZP7_US_V5

Scenario of the simulation

This contest simulation allows you show your talents of market maker! You will have to demonstrate your knowledge and skills in market making in all its dimensions: detecting market opportunties based on the spread, taking into account competition, managing risk and uncertainty linked to events, and dominating market trends. You will animate the market for EasyPlane stocks (ticker symbol: EZP).

At the start of the simulation, you own an account worth  50,000 in cash and 5 000 EasyPlane shares.

The duration of the simulation is initially set to 10 minutes, which corresponds to a 24-hour day. Using the TimeLine, you can increase or decrease the simulation speed at any time.

You can relaunch the simulation as many times as you wish.

EasyPlane company

EasyPlane is a low cost airline company. Founded at the beginning of 2010, EasyPlane mainly serves big European capitals with some flights towards the United States and Asia as well.

As its name suggests, EasyPlanes goal was to make it easy for passengers to take a flight. For this, EasyPlane uses new technologies to automate all the process: from ticket purchase (website and mobile app) via boarding (triple recognition of the person based on fingerprints, face and voice, visual and sensory scanning of the luggage) up until the actual flight (online ordering of drinks or meals and service provided by robots). Even the airplane is piloted remotely with an expert system helping the only pilot in the cabin.

For the firm, this innovative approach allowed to have much lower operating costs compared to those faced by the competitors still improving passengers safety. This approach attracted very much the generation Z formed by young people who were born in the era of new technologies, always connected and who do not have the time to lose their time.

Evolution of the stock price

Privately held for a long time and very well valued by the funds that believed in this project from the beginning, the unicorn EasyPlane publicly entered the market only two years ago. The stock price took off phenomenally right after the quotation: started off with a price equal to 45, some months afterwards the stock price got already multiplied by 5! In order to make the price more attractive for the investors, recently the firm had to divide by 20 the value of its stocks (stock split).

EasyPlane is followed by around 15 financial analysts. In particular, market participants are very much looking forward to the recommendations coming from Marina Boat and Douglas Flint, and their recommendations (not always concordant) often have a significant impact on the price of EZP stocks.

Since several weeks, the stock price of EZP has experienced some ups and downs, and ranges around  10.

The ticker symbol of EasyPlane is EZP.

What will happen today...

Today, the stock price of EasyPlane should evolve according to the information flow arriving to the market (news flow) and to the demand for the stock.

Today, we will follow with great interest the publication of the household confidence indicator at 8am. Many studies have shown that this statistic seems to be the barometer of the state of the economy. Computed every month as the difference between negative and positive opinions polled on different questions (quality of life, financial situation, unemployment, consumption and savings), the household confidence indicator measures the opinions of households. Several economic studies have also shown that it allows to forecast the evolution of the air transport sector. In particular, the study of the stock price EZP highlighted that the household confidence indicator had a significant impact on firm business, with a symmetrical effect: from a statistical point of view, a 1-point variation of the index gets translated into an approximately 3% variation in firm value.

We will follow with great interest the General Assembly of EasyPlane who will start off at midday. Jane Brown, EasyPlane CEO, will announce the annual results and should give more details on the strategi bc plan.

We will also be attentive to the reactions of the financial analysts following the General Assembly of EasyPlane. The recommendations of Marina Boat, star analyst of GS, and of Douglas Flint are notably very much followed by the market.

As always, we will also be attentive to the recommendations of the financial analysts (buy, hold or sell) with their target prices. The recommendations given by some analysts are very much followed by the market.

You can read the market consensus that gives some numerical estimates.


About the author of the simulation

Professor Franois Longin
ESSEC Business School

« The market maker has to pay attention to market conditions (order book and order flow) and to events (news flow about the firm, its sector and the economy). The activity of market making improves both market liquidity and market efficiency. »