Q:

What is the virtual stock exchange?

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Quick Answer

A virtual stock exchange is an application or a program that simulates all or most of the aspects of live stock exchange so that players can trade in stocks using virtual money without any financial risk. Virtual stocks give an investor the chance to try out investing and trading strategies, review the outcomes and ultimately increase their knowledge of the stock market.

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Full Answer

There are two types of virtual stock exchanges: fantasy simulators and financial simulators. Fantasy simulators allow players to trade in shares of real-world items like movies and television shows that are normally not listed on market exchanges. Financial simulators allow players to invest virtual money on real stock entries and hence determine whether or not they would gain money by investing themselves. All trades incur a broker commission fee that is set by the site administrator and is subtracted from the virtual cash balance. Positive cash balances on their virtual accounts also earn interest at a predetermined rate.

Virtual markets help aspiring investors to build up confidence and experience increasing their chances of success in the real stock market. It also helps them learn from the mistakes they make in the virtual stock exchange and avoid these mistakes in real life.

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