More novices have taken on the challenge of trying to trade equities in the Alliance Stock Wizard Challenge, now running. However, equities trader at Alliance Investment Management, Rachel Baker is recommending that they do more research on potential trades before they are undertaken.

Baker told Caribbean Business Report on Wednesday that 57 persons remained in the competition, which started out with 131 applicants on November 22 this year. She said of these traders, 29 persons have more than the US$25,000 virtual funds they started out with in trading. 28 are trading below US$25,000.

Baker said that the traders, most of whom are new to equities trading are doing well, but they could be doing better if they spent time doing a fundamental part of equities trading- research.

“I would recommend that they actually do research because I think the majority of the trades are just chance. If they do proper research and take the time out to know what they are doing, instead of just gambling in luck then this is something that they can make a lot of money on,” she said.

Currently the leader in the competition is up US$6200 in equity in addition to the US$25,000 he/she started out with. However persons are also losing money with one trader US$10,000 in the red after having lost their entire investment.

However Baker said that with research these losses can be minimised. She noted that while new traders pick stocks that are popular, experienced traders try to find stocks that will do well. She said that many persons were trading expensive stocks such as Apple or Google based on sentiment, while one trader found a stock that no one else had foreseen would perform so well.

The stock, ticker IRE:Governor and Company of the Bank of Ireland, was bought at $1.60, and now trades at $2.60, a 100 per cent improvement in value over time. “If you bought 7000 in that stock you would be up $7000 on your money,” Baker said in stressing the need for more market research.

The Alliance Stock Wizard Challenge ends December 17 at which point the person with the largest portfolio balance will win a US$1000 online trading account courtesy of Alliance. Second to fourth place finishers will each win a US$500 trading account with the company.

Trading is open each business day between 8:30am and 3:00pm, with pre-market and after- market trading is allowed 7:00 am to 8:30 am and 3:00 pm to 5:30 pm respectively. Competitors can buy, sell, short and cover common and preferred stocks listed on NYSE, NASDAQ and AMEX.