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Faq
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1.What is exchangeP?
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A: exchangeP is a simulated stock exchange for privately held companies. The
website leverages the wisdom of crowds to determine the valuation of companies
listed on the exchange.
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2. What does the listed stock price of a company represent?
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A: Just like on a real exchange, the listed price of each company
represents the last price at which a transaction in the stock occurred.
Since there are 1 million shares outstanding for each company, each share of
stock represents one-millionth of the total value of the company.
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3. How are prices set?
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A: The price of a company is determined by user trades. The last price
at which a transaction was completed is its current listed price.
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4. Why would I buy or sell any given stock?
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A: If you think a company is worth more than the current exchangeP
valuation, you should buy the stock with the expectation that it will rise
in the future. If you think it is currently overvalued, you can sell the
stock short with the expectation that it will decline in the future.
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5. What is “selling short?”
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A: Selling a stock short or simply “selling short” is a way to bet that a stock
price will fall. You are basically selling the stock at today’s price and
hoping to deliver it to the buyer in the future by buying it separately for a
lower price. In other words, you are effectively buying low and selling high,
just in the reverse order. When you purchase the stock in the future it closes
out the position and is referred to as “covering” the short position.
price).
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6. Why is money deducted from my account when I sell short?
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A: ExchangeP deducts an amount equal to the short position as a reserve to
cover any losses that position may incur. If you close out the position, that
money is refunded back to your account.
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7. What is the "stop loss" price?
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A: Stop loss is the price at which exchangeP automatically closes out a
short position by buying shares to cover at the market price. The stop loss
is automatically set to be 2 times the price at which you sold short. This
is put into place to prevent a user from losing more than the total amount
invested in that position.
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8. What is Bid/Ask?
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A. "Bid" is the price at which other users are currently willing to
purchase shares. "Ask" is the price at which other users are looking to sell
shares.
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9. What happens if a company goes public in an IPO, gets acquired by another company, goes bankrupt or closes its doors for any reason?
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A: All of these events are referred to as "Liquidity Events" on
exchangeP. A company undergoing a Liquidity Event will continue to trade on
exchangeP for 30 days following the Event, at which point exchangeP will
close out all positions in the company at a price determined by exchangeP
based on best available knowledge.
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10. Are commissions deducted for placing a trade?
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11. Do I earn any interest on cash held in my account?
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12. Can I add a company to the exchange?
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A. exchangeP limits the number of companies for simplicity. exchangeP
will be adding new companies to the list over time. If you think we missed
one, please email us at info@exchangep.com.
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13. I don’t have a phone that can get an SMS or I don’t want to give it to you, can I still trade?
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A. No. In order to maintain the integrity of the marketplace and limit
manipulation, we have instituted an SMS activation code.
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14. I lost all my money, what do I do now?
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A. Email info@exchangep.com and give us your sob story and we may be inclined
to give you more money.
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15. As more people trade on the exchange, will that automatically increase prices?
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A. No. Our trading system requires two opposing parties for every
transaction (a buyer and seller), so the addition of new cash into the
system should not automatically increase prices.
