You work for BioCellTech, a biotech company specialising in the development of drugs aimed at curing or alleviating the effects of various virus-based human diseases.

During the simulation, you will receive news about BioCellTech, a company whose shares are traded on the SimTrade platform. You will be able to buy and sell shares of BioCellTech.

Your goal is to maximize your trading gain at the end of the simulation. Please note that your trading activity will be monitored and any identified violation of trading rules will be sanctioned.

At the start of the simulation, you own an account consisting of €100,000 in cash and 1,000 BioCellTech shares. Given yesterday’s closing price of €100, the total value of your position is equal to €200,000.

The duration of the simulation is initially set to 10 minutes which corresponds to a 24-hour trading day. In this simulation you cannot use the timeline to increase or decrease the simulation speed or to put the simulation on pause.

Please note that in this experiment you are allowed to launch the simulation only once. You must complete the simulation and also answer the research survey at the end of the simulation for it to be valid for your grade.

Your grade for this simulation (100 points) takes into account the following elements:

• Your trading performance (50 points): your relative performance, that is, the difference between your gain/loss on your position with your intervention during the simulation and the gain/loss without your intervention (as though you have not sent any order). A relative performance between 0 € and 5 000 € is expected. ☛ Computation of the points of performance


• Your participation in the survey at the end of the simulation (50 points): the answers to this survey will be used for a research project on behavioral finance.

BioCellTech evolves in a highly competitive environment, as many other biotechs are seeking to treat the same diseases as those on which BioCellTech focuses. An additional difficulty is that the development of a new drug requires substantial high upfront expenses and can take several years (up to ten or fifteen years for some of them). Furthermore, new products cannot be commercialised before having successfully gone through the control and authorisation processes required on relevant markets and territories. The Medecine and Drug Authority (MDA) is competent to deliver a marketing authorisation to companies which successfully went through a series of cumbersome tests and procedures aimed at verifying that the product is sufficiently safe to be commercialised.

The success of a new product in BioCellTech’s sector is thus highly uncertain and a biotech’s share price can vary considerably depending on whether or not it manages to obtain the necessary marketing authorisations. A variety of other factors are likely to impact the success of these companies and their share price: good or bad perception of their products by the general public, efficacy of the products, personal qualities of the managers, relationships with suppliers, etc.

Since its initial public offering two years ago, BioCellTech nevertheless had several commercial successes that led its share price to grow by 80%.

Building on its past successes, BioCellTech is now considering launching new product lines. And now that its revenues are starting to grow and become more recurrent, it intends to raise debt from banks and capital markets. BioCellTech’s management also considers hiring new employees and expanding to new product markets and territories so that the company keeps scaling up.

After several decades of rapid growth, BioCellTech a successful initial public offering (IPO) in 2017. Since its introduction in the stock market, the stock price of BioCellTech (code: BCT) has increased from its introductory price of €35 to a recently new high of €125. This positive trend in the stock price has also been accompanied with market volatility.

BCT shares are currently priced at approximately €100.

For several weeks, rumors of a takeover bid in the pharmaceutical sector have also been circulating. Market participants see BioCellTech as a potential target.

Today, several events related to BioCellTech will happen and may have a significant -positive or negative- impact on BCT share price. Information about these events qualifies as inside information until it becomes public and available to all market participants.

Events of the day

BioCellTech is waiting for the decision of the Medicine and Drug Authority (MDA) about the authorization for its new product. The announcement of this decision by the MDA will have a significant impact on BCT share price: in case of a positive decision, the share price will sharply increase by 20% or more; in case of a negative decision, the share price will sharply decrease by 20% or more.

BioCellTech will also announce its profits for the last quarter. If the realized profits are higher than the market forecast, BCT share price will increase following the company’s announcement. On the other hand, if the realized profits are lower than the market forecast, BCT share price will decrease. For example, realized profits 50% higher than the market forecast would translate into a 20% price rise, and realized profits 50% lower than the market forecast would translate into a 20% price decline.

Moreover, the stock market could strongly react to a takeover bid for BioCellTech from a competitor. If BioCellTech accepts the bid, then BCT stock price would rise towards the proposed target price. If BioCellTech rejects the bid, then BCT stock price would fall.

Inside information / Public information

Events will happen during the trading session. You will be informed about each of these events before they occur, which means that you will hold inside information about them.

Inside information privately disclosed to you will appear in blue in the ticker tape at the top of the Trading page like this:

Public information announced to all market participants will appear in black in the ticker tape at the top of the Trading page like this:

Inside information privately disclosed to you will become public information announced to all market participants after three hours.

If you trade after you receive inside information but before the information is publicly disclosed, you can expect to make a profit, but you have also engaged in insider trading.

The entire trading session will last for 10 minutes. Your objective is to maximise the value of your portfolio (composed of a mix of cash and of BCT shares) by the end of the trading session.

If you engage in insider trading, you may or may not be caught and sanctioned.