19 Sep 2018 How can I win with #iTradeWithAMillion?
Sanlam iTrade has run a number of virtual trading competitions in various forms over the years. For most participants, they provided an opportunity to learn and to experience real market conditions without any risk or cost. This is indeed the aim – to offer a safe learning experience while having fun. In past contests, families and friends ran their own small competitions – with some unlikely winners! The first prize of R25 000 is certainly not be laughed at. Looking back at our previous contests and winners, some interesting facts and figures emerge:
First virtual trading competition
The competition is closed to professionals, so all our winners have been private investors or even novices. The first competition in 2007 was won by a young guy who knew a bit about short-term trading. As there was no volume check on virtual trades, he made unrealistic profits, trading 20 or 30 times a day. We had to change the rules…
Virtual trading very realistic
So in the next competition, instead of trading at the last traded price on the JSE, you had to buy at the offer (price at which sellers are offering to sell) and sell at the bid (price at which buyers are bidding to buy). This made the competition more realistic. On one of the chatrooms, our competition was a hot topic. One person said he’d like to see how the leaders would do in real trading – and a leader responded that he was in fact doing the same
trades on his real trading account, and was surpassing his competition profit! Why? Because in real trading on the JSE, one can often trade between the bid and offer.
Amateurs vs professionals
In 2008 we asked eight investment professionals to compete against a field of amateurs. They included SA’s top fund managers who regularly make calls about the market on TV. The amateurs beat them easily, as their focus was on long-term investments while the amateur competitors traded more actively. It was a great learning experience for all, however, as the professionals shared their insights with the amateurs.
Do CAs have an advantage?
There does seem to be a small advantage, as about 30% of our winners have been CAs or CA students. In general, however, our winners are from diverse backgrounds. There have been several women in the Top 10, including one winner. There are competitors of all races in the Top 10 every year, ranging from students to IT techies to pensioners.
The oldest winner
Our oldest winner was 63 years old, and we’ve had a runner-up aged 67 years. That competition ran from June to the end of August 2011. During that time nearly all the shares declined except for the gold price and gold shares. The top iTraders that year were mostly in gold shares. The winner did take profits at one stage, but soon realised he was so far ahead that no-one would be able to catch up with him if he held on. So he bought back and held
until the last day.
Sanlam iTrade co-sponsored the CNBC Africa Top Trader reality TV show in 2013. To select the eight competitors for the reality show, we ran a virtual trading competition over one month only. The winner put all his eggs in one basket and bought Lonmin shares. By the last week he wasn’t even in the Top 10, but over the last three days of the competition Lonmin surged wildly and gave him a profit of nearly 20%.
Trading the world
In 2016 we allowed competitors to trade any share or ETF in the world on our iTradeGlobal platform. No derivatives were allowed, but one should never underestimate youngsters! We hoped the playing field would be level, but low and behold, we found out that there are geared ETFs. Soon those trading in these instruments were leading the competition. Geared ETFs give you three times the profit or loss on an instrument like gold, oil or gold shares. They’re a bit too complicated for the average investor, so we decided to limit trading to only shares and CFDs in the JSE Top 40 Index and the Dow Jones 30 Index. Over the years, we’ve received many emails from people who participated in our virtual trading competitions – thanking us for the great learning experience. We’re confident that this year will be no different. Enjoy.