SLCapex Day 1 - Learn the market

This post is the first in an hopefully long series about my investments in the Second Life Capital Exchange market (SLCapex - www.slcapex.com). As you know if you're a fellow reader, I started investing on this virtual stock exchange after Arbitrage Wise, the boss of JTFinancials, offered me 5'000 L$ as an initial fund. The deal is that I can invest it, and count it towards the 1'000'000 goal, but not withdraw before the goal is reached.

So I'm now starting to learn about this market, its tools and possibilities. I will probably give investment tips, but for the time being, I'm just a very newbie... so let's go for a very simply description of what SLCapex is offering.

There are for the time 16 companies offering stock on the market, and two Initial Public Offerings (IPOs) going on. As on any stock exchange, you can place market or limit order. To make it clear for non-market oriented people, here is a brief summary:

Market buy: you buy at the price of the lower sell offer on the market
Market sell: you sell at the higher buy offer on the market
Limit buy: you buy at the price you define, as soon as someone agrees to sell at this price
Limit sell: you sell at the price you define, as soon as someone agrees to buy at this price

These are quite usual tools. On top of that, the SLCapex website offers announcements from the companies being trade, and users forums. There are not costs for buying stocks, and a 2.5% commission when selling, so any sale at a price more than 2.5% higher than buying price is a benefit.

As the market is no as liquid ("active) as RL markets now, there are sometimes quite large gaps between "Bid" (highest limit buy offer) and "Ask" (lowest sell offer), so limit orders can take time before being settled, and portfolio "market" value can fluctuate strongly.

So you must keep in mind one of the very basic market principles: "No sell - no loss". Even if a share you bought has now a lower market price, you do not loose money as long as you don't sell it. The loss occurs only if you sell at a price below buying price.