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Posted by: O'Ryan Feb 9 2013, 04:54 PM

How do stocks work in shadowrun? I know payment in stocks is something corps sometimes do, and there may be characters who legitimately want to invest. Are there existing rules I've overlooked, or do any of you have experiences that have either worked out well or are to be avoided at all cost?

How we're doing it currently (though a month hasn't passed so it hasn't come up) is you get 1% of the amount invested each month, plus +1% per number of hits on "Knowledge: Stock Market" each month. Glitches cause a loss of money, haven't decided how much.

Thoughts?

Posted by: kzt Feb 9 2013, 09:03 PM

That's way too much return, far too guaranteed. Take your starting million and put it in the stock market. You'll get 130K profit per year minimum with no skill.

Posted by: _Pax._ Feb 9 2013, 09:11 PM

130K/year is ~10.8K/month.

1% of 1M is 10K.

So you basically agree with his baseline rate of return.

My only modification would be to change the per-hit amount to 0.25% (2.5K per 1M invested) rather than a full percent.

Posted by: kzt Feb 9 2013, 10:35 PM

No, I am arguing that his baseline is crazy high and far too predictable. 12.7% risk-free annual return is much higher than actual low-risk returns.

Posted by: _Pax._ Feb 9 2013, 10:51 PM

But ... you just said you'd get 130K minimum returns, safely. That's 13%, more than the 12.7% you just cited as "crazy high" ...

::confused::

Posted by: kzt Feb 9 2013, 11:15 PM

That's what his proposal said, rounded off. I wasn't endorsing it, just pointing out what his numbers meant.

Posted by: O'Ryan Feb 9 2013, 11:44 PM

I wanna play at your tables where you have a million bucks! I've been using a hundred thousand as a baseline for math. Not that it changes anything but perception, but throwing it out there.

I agree that it is entirely too stable a return - it's way more than if you were to stick it in a bank with roughly the same risk. How do we fix it? My idea here is not that your "stock value" is in an individual company, but that you're trading it around periodically... not so much as a to call it a day job, but not letting anything sit there either.

Dropping it to .25% baseline plus .25% per hit will certainly give lower, more realistic numbers but it still doesn't feel exciting. Putting a hundred k into the market and getting back roughly 1200 a month is workable, but.. I feel there there should be the possibility of making a larger chunk with an equal possibility of losing an equally large sum.

Does it sound workable to make it a target number check? Say... threshold 3-4 (SR4), net hits on either side change your "stock value" by +/- 1%? If we take away the guaranteed value and force you to roll, an average Joe (Int 3 + Knowsoft 5 if they have money to play stocks = 8 dice, call it an average of 3 hits) would stay the same or lose a little with the potential of winning big or losing a ton.
Opposed to that, an opposed roll? Call the market rating 6 since big players across the world are involved (12 dice), versus your Knowledge: Stocks (Trading) with the same gain or penalty.

Posted by: Manunancy Feb 10 2013, 12:03 AM

If today's stock market is a good example, the average yearly return was around 10% - including the nosedive periods. But if today's market is to be considered, unless you're giving the money to a connected broker, the returns will probably be worse as you'll be competing with very nasty computers with (supposedly) top notch algorithms, the odd stock broker adept who punches his financial skills through the roof and the more mundane brain-expanded trader. With probably a fairly poor service and hefty transaction fees as the big boys will have no qualms lobbying hard to the corporate court to optimize their ability to fleece the small sheeps and keep the alpha rams from upsetting their own deals and arrangment.

So you'e probably going to aim for a 'hold and cash in dividends' route, maybe trade your actions for somehting more neutral and stable like a share in a Zurich-Orbital mamanged fund. Not fancy, but far safer. The main problem being that unless you come with at least than several millions, don't count on those guys taking your cash.

Posted by: The Mad Fool Feb 10 2013, 12:26 AM

I think it should depend upon the type stock in question. If we're going to do stocks in Shadowrun, there's no reason not to apply intricate detail!

And yes, kzt is absolutely right. That kind of return is far too high and far too guaranteed. I think we also need to separate short-term stock trading and long-term investment because they work fundamentally differently.

Suggestion:
Short-term stock investing (actually, any financial instrument) is a lot like poker because short-term stock trading is a zero sum game. Therefore, I'd make it a contested roll somewhat akin to Hacking on the Fly. Use your Knowledge (Financial Instruments) skill as your attribute, then add the rating of your stock trading program. Yes, this means you need to buy or make a stock trading program. There should be special rules for pirating that or making your own, since connecting onto a stock exchange is never free. Now, since you've now connected onto the exchange, you get to name how much money you invest, which can be increased or decreased before each roll. You also name a number X, which will be how much of your money you're aiming to make. Then you make your roll (representing, oh, say, an hour of work), and the GM makes two hidden rolls: one to notice you, then a roll contesting yours with a pool equal to the highest dice pool among those who've noticed you. This cuts both ways: you can make Knowledge (Financial Instruments) + rating of stock trading program to find someone who has made money off of you. If you win and you get more hits than the size rating of the exchange, you make X% of your principle for each net hit. If you don't get enough hits, you lose X% (or some multiple; I'm making this up on the fly, but it should represent the cost of the broker's transaction fees). If you lose the contested roll, you lose X% for each net hit the other side gets. Like in real life, this means that short-term trading is fairly easy when you first start...but it gradually gets worse when the big players notice you and do their level best to take your shirt. Only, in SR, the big players are fragging Great Dragons. Note to GMs: stat them accordingly. Lofwyr's pool should involve more dice than you and your players physically possess. Combined.

Note that there are, as usual, various situational modifiers to these rolls. In addition, smaller exchanges should give a bonus to those perception rolls, while very large exchanges might even incur a penalty. Betting big makes you much easier to notice, and so does the simple passage of time. Generally, being noticed is inevitable, so it's as much about knowing when to stop as knowing when to play. You can leverage and short sell, which should have some mechanical effects. Remember the In Debt quality?

Now, long term is a different story, because it is no longer a zero-sum game. However, you have far less control. I'm thinking this is more of an extended roll, but not one based upon the player's dice pools. Let's say...the player picks an amount to bet (call it P for Principle), a type of stock (say, AAA, AA, A, B, etc.), and then rolls Intuition or Logic (player's choice) + Knowledge (Financial Instruments) + any relevant bonuses the GM might think appropriate. This roll picks the portfolio the player chooses to invest in. The GM then each month secretly rolls some static pool modified by the number of hits you get, the safety of the stock in question, and the current economic climate. The pool should be, generally speaking, pretty low, and its max hits limited by the safeness of the stock (so no max hits for a tiny company, but a cap for AAA absent strange circumstances like "PCs just blew up their major competitor's factory" or something). However, always apply exploding six's so there's always a chance of the PCs getting _really_ lucky. Each month, P increases by 0.1% per hit, but if the roll fails or glitches, lose half of P. If the roll critical glitches, lose 90% of P. If you give your money to a broker, you don't lose anything on a glitch or failure, though you still lose 90% on a critical glitch thanks to the broker either going bankrupt or saving themselves by cutting your loose. However, you only get 0.01% per net hit the broker gets.

Anyways, that's a quick sketch off the top of my head, so the numbers can be fiddled with.

Posted by: kzt Feb 10 2013, 12:51 AM

My thought is that runners should have a lot of trouble investing. For example, most are doing it via a fake ID. What can a bank or broker do if if finds out that you are using a fake SIN? Well, yes, they CAN take all your money. What are you going to do, go to down to KE and whine? Stage an attack on SK Financial in Berlin? Neither of these is likely to end well.

The way to make real money in the stock market is the way professionals do it, by cheating. Since the average runner can't build a huge high frequency computer trading network or have the Treasury Secretary tell them about the Federal Reserve's secret interest rate change plans ahead of time they should consider obtaining inside information. For example, finding out about a planned acquisition, profit/loss release, government statistics, the "sudden loss" of a key exec or researcher, etc. Then make a long or short play using a really high quality fake ID, followed by the money being rapidly moved out. Lots of chance for big wins, but also chance for big losses as there might be other things going on that the players don't know.

Margin trading on long or short sales is the key to making really crazy big returns, but if you allow fake IDs to trade on margin the players have a license to mint money, as they can abandon the ID and not pay on losses and only keep winners. That would be kind of like Wall Street's private gains and public losses, but I digress...

Posted by: O'Ryan Feb 10 2013, 01:12 AM

KZT, the runner in question, O'Ryan, has a real sin and even day job: Ares Wageslave. Suppose for the ease of conversation he's short term trading assorted Ares stock. ("I'll trade you... 100 shares of NASA for 80 shares of KE and money!")

I absolutely agree the best way to do it is to cheat. I fully plan on leveraging insider knowledge, taking jobs that will specifically increase my portfolio's value, doing building hits on competition...
But if I'm going to cheat a system we have to establish the system first!

As for the margin trading and fake IDs, despite the impression I probably give off, I am against printing my own money in games. I have the capability of robbing 10 million people a day for 1:nuyen: - doesn't mean I'll do it, because then I'm not playing Shadowrun anymore.

What I'm really looking for is a set of rules that are easy to grasp (The Mad Fool ) that contain both risk and reward in equal measure.

So far I'm thinking opposed roll, where the market gets extra dice each successive month as you attract more and more attention until you lay low for a while. I like the idea of automatically including exploding sixes on both sides of the roll - you may think you have all the skill in the world, but sometimes you just get (un)lucky.

So far then, I think we have:
Int/log + Finance (Stock trading) + market analysis tool (treat as assistance roll from your analyze program?)
versus
Market's dice pool, which grows every time you "win"

The Mad Fool, I know it's not exactly what you said for short term trading, which you clearly know more about than me, but does that sound feasible? The numbers are taken out, since those we can just plug back in and tweak once the system itself seems sound.

Posted by: The Mad Fool Feb 10 2013, 04:20 AM

Haha, I suppose I did get rather intricate, didn't I? Your rule basically boils down to what I was talking about (just with a bit less specificity and detail) so it should work. Only caveat is that the short-term market moves fast, which means the market really should get more dice with every successive week or even day, depending upon the market in question. Perhaps have each trade draw a base amount of attention, win or lose, so long as you've won once? And then you can have it fade away gradually over months. So if you make a whole bunch of trades in a compressed time frame, you'll rack up a lot more attention than if you do it a little bit every once in a while.

Posted by: kzt Feb 10 2013, 04:33 AM

You also tend to attract regulator attention if you only occasionally trade but always end up on the winning side of large-scale short or long sales. Of course, in SR it could very well be "regulators" who won't bother with the whole legal system if they suspect what is really going on.

Posted by: The Mad Fool Feb 10 2013, 04:56 AM

Especially since those "regulators" can trace you and, if they find you're on simsense, Black Hammer you into oblivion. Incidentally, I was talking more about the attention of the other players, rather than the attention of regulators. Regulators are definitely a present concern, but the main thing that keeps ordinary folks from winning on the stock market is the other players bullying them out.

By the way, you want to know the real reason Wall Street can win so much? Because they get the stock market feed before everyone else does, that's why. It's only a difference of a few seconds, but that's all they need. There's a reason they trade right on the floor; speed is everything and when the market starts to tank, they'll be able to see people starting to sell and then immediately dump all their shares, liquidating their portfolio before anyone else even realizes what's going on. And don't even get me started on all that Black Box nonsense....

Posted by: Shaidar Feb 10 2013, 05:21 AM

Shades of the Nano-second-Buy-Out.

As to insider trading based on the Runners meat-world actions (extractions, building hits and such); I'd have them apply a variable modifier. In secret throw 2 different color dice, if the both come up odds the modifier is negative, both evens the modifier is positive; next throw another die to determine the magnitude of the modifier.

After all this is a way for Runners to double dip, they get paid for doing the run by Mr. Johnson and (hopefully) paid by the market for the results of their run.

Posted by: kzt Feb 10 2013, 05:45 AM

That would never happen in real life. The SEC says so.
http://www.nanex.net/20100506/FlashCrashAnalysis_Part1-1.html
http://www.nanex.net/aqck2/3601.html
http://www.nanex.net/aqck2/3660.html

Posted by: Shaidar Feb 10 2013, 06:20 AM

SR Lore says it can happen, and already has happened.

Posted by: O'Ryan Feb 10 2013, 08:39 AM

I'm deff. incorporating that or something similar.... though if I'm the one doing the run I'd hope I'd have the foresight to move stocks around assuming for my success!

TMF, I'd like to keep the stocks to a monthly roll for book keeping purposes so it can be handled at the same time as rent... it just assumes that you've been up and down and actively trading the entire period.
Would adding exponential dice to the market as you win help balance that? So unless you're throwing around millions of nuyen or however it is you identify yourself as not to be messed with bigger and more sharks swoop in on you?

Posted by: Nath Feb 10 2013, 01:37 PM

SR Lore also says the knowledge required is quite "unique".

Posted by: The Mad Fool Feb 10 2013, 02:31 PM

The SEC said so...you mean the SEC that, during the Real Estate Crash, had most of their senior management looking at porn eight hours a day? The SEC has a vested interest in not letting people know that this kind of thing is possible even if it is, and for people in the Financial sector, fooling the SEC is sport.

O'Ryan, yeah, making the increase exponential would definitely help.

Posted by: kzt Feb 10 2013, 07:12 PM

Not that I included the Nanex research links for any reason...

Posted by: The Mad Fool Feb 10 2013, 10:08 PM

Well, the Nanex research, as good as it is, only really addresses that such a thing cannot happen in that particular way. I don't think it really proves that something like the Nanosecond buyout is impossible. Extraordinarily difficult, yes, but hardly beyond the bounds of possibility.

But let's not get into a debate about the vulnerability of the Financial System. ^_^'' I was snarking as much as anything else, anyways (SEC is pretty much low hanging fruit in that regard). Let's focus on stocks in SR. Speaking of which, I think no stock trading system in SR will be complete without rules for leveraged trading, if only because I can totally see that exploding hilariously in the party's faces.

Posted by: Halinn Feb 10 2013, 10:29 PM

You could also look at making stocks difficult to cash out on in larger amounts.

Posted by: kzt Feb 10 2013, 10:41 PM

Actually what the Nanex studies on the flash crash and other anomalies show is that truly odd stuff is going on inside the HFT engines and their interactions with the exchanges, including event loops that happen in the sub-50 millisecond range. The SEC has no idea how to handle it and has pretty much stuck their fingers in their ears and chanted "I can't hear you".

Posted by: The Mad Fool Feb 10 2013, 11:45 PM

Oh, is that what the SEC was doing? xD Sorry, I misunderstood; I thought it meant "this is what happens so we know what to fix now"....

Well, I'm glad we're on the same page, then. xD

Posted by: ggodo Feb 12 2013, 08:30 AM

All I've really gotten out of this thread is Financial Adepts. I'm ok with this.

Posted by: DMiller Feb 13 2013, 12:35 AM

I created a word document and an excel spreadsheet based on this thread.

The Mad Fool and O'Ryan, is this what you had in mind?

https://www.sugarsync.com/pf/D024671_68_6642802422
https://www.sugarsync.com/pf/D024671_68_6642803550

-D

Posted by: The Mad Fool Feb 13 2013, 02:45 AM

I love it!

Posted by: DMiller Feb 13 2013, 03:02 AM

Happy to help.

-D
Edit:
If RANDBETWEEN(1,6) doesn't work for you replace it with: INT(RAND()*6)+1
RANDBETWEEN is an add-on for Office2003 and earlier, I don't know about later versions.

Posted by: DMiller Feb 13 2013, 07:59 AM

After looking at this some more, I have a question/comment.

The short investment seems to work nicely, however using this same method for the long investment seems like you would earn money very slowly. Does that seem right?

-D

Posted by: O'Ryan Feb 13 2013, 11:54 AM

It definitely shows a large amount of work has gone into it! Enough so that I'm torn - I really don't like the idea of daily rolls, since that could be a huge amount of book keeping. I'll play with the long term investment stuff though, to see how well it works for me.

At the very least, it's a huge step forwards from the crap I had.

Posted by: The Mad Fool Feb 13 2013, 02:41 PM

You may wish to check the numbers to suit what feels right to you. For instance, I just noticed that I'd actually change the base from gaining 1% to losing 1% to reflect transaction fees.

Also, something to keep in mind about short-term rolls:
Playing the stock market short term should be something that consumes the individual's time for the day, like a full time job. This can be avoided via an Agent, but I'd give Agents a -2 penalty to doing this because of the inflexibility of their programming. Also, you can force your player to request the Agent's results; failure to do so for a couple days means he could be racking up debt without even realizing it.

Posted by: DMiller Feb 14 2013, 12:57 AM

Running the numbers with a -1% base and still using the 16 dice pool for the player, you lose money far more than you earn it. If that were the case no one would invest. Looking at the base numbers and the amount of time it takes to complete the process, the base of 1% does seem to be fair. I think for the long-term investments changing from a base of 1% to a base of 3% and from +/- 0.25% to +/- 0.5% seems to work pretty well too.

If the player skips a roll, just treat it as 0 hits (no glitch) and move on (IMHO).

As for the Agent; there really is no need for a -2 to the dice pool. There is no autosoft for agents to provide the skill to make the test (at least none by RAW), and even if there were Autosofts max out at rating 4. This will leave an agent with Rating(6) + Software (6) + (optional) Autosoft (4) or a total of 16 dice maximum. Without the optional Autosoft, the agent caps out at 12 dice. Agents are also incapable of using edge. I would also make the player decide on "stop trading" conditions for the agent, if those conditions are met the agent cashes out, if not it keeps trading until it runs out of money. So something like "after 15 days or if you lose money 3 times in a row cash out", then it's fire and forget and the character can not abort the trading (just to keep it simple). I would also use the spreadsheet for the agent, the player would not be rolling dice as it is automated. Again, that is just my opinion.

I personally think that requiring a dedicated 6 hours per interval to allow the roll seems fair. That is pretty close to a full-time job for daily trading but still allows for other activities.

-D