Playing the Stock Market, And Insider Trading Options

[TheMidnightHobo]

I just got this idea during a run my group and I are doing where we have to trash (Re: we have to make people not want to live in it, so we're going to poison the water supply just enough to give people upset stomachs, but not enough to kill them, etc) an Ares Arcology, and it is a fairly simple plan, I think.

I just want to buy a massive amount of stock in Ares' biggest competitor (whoever my GM has it be in this scenario) before we trash the place, and then trash the place, and then sell the stock again. It seems like it'd be fairly simple to do, and I'm just wondering if other people have done this and what problems they've run into.

Thanks a bunch!

[Mister Book]

The GM giveth, the GM taketh away.


Seriously though it all comes back to one of the problems with cyberpunk in general. If you're able to hack a bank, take the money, fund it to untraceable bank accounts why are you running the shadows?

Say you do that, you make it rich. Then what?

Do you keep building up power (Cyber/gear/magic) until all you can face is a great dragon without sighing ho hum and blasting it with your power armor?

[BishopMcQ]

There hasn't been a lot of talk about that in SR4--for previous editions, I'd look up the Chromed Accountant's posts. Corporate Download is probably your best bet. There is also a section in System Failure where he explains IPOs and goes into stock trading.

[Blade]

First of all, Ares is a fragging AAA megacorporation. It's bigger than today's top 10 multinationals together. Something like this will have a ridiculous impact on the value of its stock. And it's probably the same for its biggest competitor: except if it's a small company, you probably won't be able to see the impact of your action in the stock market.

Secondly, the stock market in Shadowrun isn't as active as it is today. Most megacorps have very few shareholders and little to no public shareholders.

If you're still interesting in some insider trading, you can try to get in touch with Broker-X (or something like this). It had been introduced in Loose Alliance IIRC. It's a shadow business that gather intelligence (and money) from runners and invest it accordingly. The idea is that one shadowrun won't make a noticeable difference in the stock market but a thousand might. I don't know if they're still around in 207x, though.

[Warlordtheft]

I'd go for a options contract in Ares instead. Basically you would purcase someones option (a contract stating that they will buy Ares stock at price A regardless of current price, at a particular time). In this instance, the option price say $50 is due in four days for 1,000 shares). Prior to the run, the price is $55. If you bought that option, and the price stayed the same, you would loose $5,000 (math:$50,000-$55,000= loss of $5,000. If you do the run and the stock tanks to $40, you earn $10,000.



It is a very simple example, and runs probably occur because of this all the time. Of course with a AAA, a single run will probably have negligible imact on the stock price.

[Ravor]

Do you really want to risk tipping Ares off that something bad is coming? Not to mention that unless you have a totally rock solid SIN (As in, might as well be legit.) that has an extendsive history of buying and selling massive ammounts of stock you are just throwing away your money since you'll never be able to collect anyways from a burnt SIN.

Oh, and even if you did mananage to make this ploy work without blowing the run itself, don't you think Ares has ways of monitering the stock exchanges and coming after people that they suspect of being behind the run, rightfully or not?


Basically what I'm getting at is that is idea is a viable way of making alittle extra cred, but the moment you get greedy the forces of hell are going to come down upon you like Thor's Hammer. You'd be better off using your ill gotten gains to start small in the market and work your way up from there until the ploy you want to pull off fades into the background noise of your massive fortune... But then again, once you get to that point why haven't you bought your own private island and retired unless Fastjack or Captain C ask you to write an article for one of their projects?

[TheMidnightHobo]

Hmmm... well, maybe not one of Ares' competitors then, but maybe someone else likely to profit from this... I don't know, actually; this is sounding less and less worth it. I hadn't taken into consideration that they're a AAA corp, and yeah, have a bunch of holdings and such. Maybe this could work for smaller targets though... Thanks guys, you've given me a lot to think about.

[deek]

Had this come up in my game a few weeks ago.

I drew similar conclusions that 1) SR Corps are not publicly traded much, so there's not a huge stock market volume to make money and 2) these corps are so big and spin publicity and marketing so often, that even with a small market of stocks to trade, hardly anything would impact the stock.

So, that pretty much squashed any further thoughts in that direction at my table.

[Twilights_Herald]

Well, the other thing to remember is that, for the most part, AAA's aren't actually corporations running anything in and of themselves. (As I recall, the only ones still like that are Mitsuhama and Aztechnology.) Instead, they're large umbrella-organizations, each with dozens, if not hundreds, of AA, A, and non-multinational corporations held as a majority stakeholder. So you're likely not making a run on "Ares Macrotechnology" per se, but, for example, the "Ares Arms" arcology, which has a far greater percentage of its' stock made public and frequently traded than the Ares Macrotech stock, but is also a much smaller piece of the pie. That is what you want to identify if you're going to try an insider trading scheme. You still have all the problems of the SIN being noticed, and so on, though.

[Chrysalis]

I recommend everyone reads corporate shadowfiles. It explains a lot of these kinds of problems. There is Ares stock, but Ares like all the other AAAs are conglomerates, they are many hundrend companies all rolled into one. As for there not being comparable companies in RL: Nestle, Monsanto and GE.

[SincereAgape]

Building off what people have said, AAA stocks are very rarely open for the public market to purchase, and I believe the last time this happened in a mass quantity was Novatech in 2065, aka the Matrix Crash 2.0

It also takes a lot of money to make money. Stocks for a giant company will probably not drop unless you pull of a Shadowrun of large ramifications, such as assassinating all of Horizon's famous trid stars in a single night. Or multiple Shadowruns against the same company, as you slowly destroy their whatever assets they obtain.

But by the time either of these events will happen, there will be severe heat onto the group.

[MusicMan]

I can just see it:


"Boss, someone just ran off with the designs to our newest line of kill-o-matics."

"...and? Have R&D whip up some new ones."

And then...

"Boss someone just made our stock drop a point."

"KILL EVERYONE INVOLVED!!!!!"

[Jaid]

mind you, this sort of thing could definitely be pulled off on a smaller scale. the megas aren't the only ones who hire shadowrunners, nor are they the only targets of shadowruns.

[kzt]

The smallest of the AAA is somewhere about the size of the economy of China. They have a LOT of resources to use if you pick a fight with them.

[Tachi]

*snip* assassinating all of Horizon's famous trid stars in a single night *snip*

Hmmmm...
*Wanders off thinking evil GM type thoughts*

[Warlordtheft]

I recommend everyone reads corporate shadowfiles. It explains a lot of these kinds of problems. There is Ares stock, but Ares like all the other AAAs are conglomerates, they are many hundrend companies all rolled into one. As for there not being comparable companies in RL: Nestle, Monsanto and GE.

I'll second that. Believe it or not it also has other options, the section on hostile takeover, defensive measures. These are all good run material. After Vice, I hope they do an update to this book.

In any event, most of the megas are public orporations (though not all), and are regularly traded on the stock market. The fact of the matter is, most corps have 4 or 5 major stake holders. The rest of the stock being held by minor investors (the % varies by company). These major stake holders may comprise anywhere from 25% to 80% of the voting stock. SK might be 90%, but I don't have the book in front of me. They are "management" companies" who provide managing expertise so their assets/subsidiaries perform well.

Aztechnology and one or two others (Horizon/SHiawaise I think) are privately owned.

[Jaid]

The smallest of the AAA is somewhere about the size of the economy of China. They have a LOT of resources to use if you pick a fight with them.

yes. fortunately for me, i said smaller scale, and most people will agree that AAA corporations are not smaller than AAA corporation scale.

you could quite possibly pull this off with an A or lower corporation i think (oh, they'd probably be able to figure it out, but as i recall you have to be at least AA to count as extraterritorial... which means you'd burn the SIN you used, but they would most likely send the cops after your fake SIN, which is much better than getting a visit from an ares firewatch team or suchlike).

of course, if said A or lower corporation is part of a mega, then you're still screwed, so do your homework, kids (IMG:style_emoticons/default/wink.gif)

[TheMidnightHobo]

yes. fortunately for me, i said smaller scale, and most people will agree that AAA corporations are not smaller than AAA corporation scale.

you could quite possibly pull this off with an A or lower corporation i think (oh, they'd probably be able to figure it out, but as i recall you have to be at least AA to count as extraterritorial... which means you'd burn the SIN you used, but they would most likely send the cops after your fake SIN, which is much better than getting a visit from an ares firewatch team or suchlike).

of course, if said A or lower corporation is part of a mega, then you're still screwed, so do your homework, kids (IMG:style_emoticons/default/wink.gif)

Haha, yeah, homework is a good thing... Last time we didn't work out all the details we caused a race riot in Boston. XD But that's a different story. (IMG:style_emoticons/default/nyahnyah.gif)

After hearing about the AAA corps, yeah, I figure we just do our job this time and we can try this little trick the next time we're picking on a smaller target. And I figure burning a SIN isn't that bad if you make off with enough money.

[Zen Shooter01]

This issue of the stock market comes up now and then. First, of course there's a vigorous stock market in the 6th World - corporations live and die on the value of their stock. And a clever shadowrunner will say, hey, I've got 30 thousand to invest, and maybe some insider knowledge. How do I get a piece of the pie?

The answer is to abstract it. If the GM assigns a nuyen value to a share of MCT, then the GM is going to have to determine, either by fiat or some random method, how and when that value changes on an hourly basis. Then the players are going to complain because they don't agree with the result.

And, if you assign a nuyen value to a share of MCT, then the next thing that's going to happen is the investor PC is going to want to know the current price of a share of Wuxing, Debeers Omnitech, and Sandstorm. Then the player is going to want to know about government bonds, mutual funds, virtually traded bullion, and every other thing, and your game becomes 6th World Financial Markets. All your time will be taken up saying, "Wuxing is down 1.2 this morning," and listening to the players moan about it.

So this is what you do. Create a knowledge skill called Investing. Let the PC roll it every three game months against a threshold of 2, dice pool modified by insider knowledge, market conditions - you knew that a certain executive was going to "retire", +1, bad quarter, -1, etc. For every net hit, the money the PC has invested grows by 1%. If the roll fails, they lose 1%. If they glitch, they lose 2%. If they critical glitch, they lose 5%.

It's a simple way for PCs to invest, without their portfolios taking over your game.

[Tachi]

That's some good thinking there Zen.

[Dragnar]

Apart from the glitch-part. Glitches in SR are still successful tests, so losing money on one is a bit wierd.
Better to keep it as intended and invent a complication to acompany the successful test, like the ECSE getting really interested in your perfect market predictions...

[Penta]

Actually...

Insider trading, at least in the US markets, is a big no-no. (Weirdly, I don't think it's illegal in Britain, although that may be changing.)

10-20 years of prison-time kinda no-no.

In the sixth world, how much do you wanta bet the SEC has in-house deniable assets specifically to enforce the securities trading laws?

[Marshwiggle]

Now there's a new type of campaign... collecting evidence for SEC type enforcement against, say, Johnsons putting together a set of runs which together would actually change a stock price significantly, when the Johnson also has millions (legally or illegally) to invest in the market.

[Penta]

Hey, what do you think Chromed Accountant was?

IIRC, he did black ops...

...for the IRS.

[Megu]

On page 35 in Runner Havens this is mentioned, regarding the nature of the HKFEZ.

"Along those same lines, that also means one less official body conducting oversight on financial transactions. This is an important distinction if you happen to be a shadowrunner who likes to dabble in the market a little."
- Nephrine

"No thanks. Playing the market and shadowrunning is like taking a tour of the sausage factory. Now that I know what goes on behind the scenes, I keep my money in gold bullion."
- Snopes

Hope this helps.