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A Simple Stock Exchange Simulation (part 1)

24 Dec 2014

The full script is available here

A Simple Stock Exchange

Suppose we have a stock exchange that only trades equities of three companies: Nokia, Apple and Google. The number of shares of each company that the exchange can trade is listed as follows:

equities={'Nokia':1000000,
          'Google': 2000000,
          'Apple': 2400000}

The exchange has allowed three traders: Laura, John and Mark to trade on the exchange.

tally={'Laura': {'Nokia':0,
                 'Google':0,
                  'Apple':0},
       'John':{'Nokia':0,
                'Google':0,
                'Apple':0},
       'Mark': {'Nokia':0,
                 'Google':0,
                  'Apple':0}}

Every day, the probability of a trader making a purchase is determined by drawing from the uniform distribution. If the probability is greater or equal to 0.5, the trade purchases 50 shares of each company. Else, the trader sells 25 shares of purchased stock.

import random

def purchase_stock(broker):
    """
    Trader buys 50 shares of each company
    """
    for company in equities.keys():
        equities[company]=equities[company]-50
    temp_dict=tally[broker]
    for company in temp_dict.keys():
        temp_dict[company]=temp_dict[company]+50

def sell_stock(broker):
    """
    Trader sells 25 shares of each company back to the exchange
    """
    temp_dict=tally[broker]
    for company in temp_dict.keys():
        if temp_dict[company]!=0:
            """
            Trader can sell stock back only if he/she bought it
            in the first place
            """
            temp_dict[company]=temp_dict[company]-25
            equities[company]=equities[company]+25

We will also add a method to reset the numbers of shares owned by all traders and a method which simulates one day of trading at the exchange.

def reset_exchange():
    """
    Sets the tally of each trader to 0
    """
    tally={'Laura': {'Nokia':0,
                     'Google':0,
                      'Apple':0},
           'John':{'Nokia':0,
                    'Google':0,
                    'Apple':0},
           'Mark': {'Nokia':0,
                     'Google':0,
                      'Apple':0}}
def trade():
    for broker in tally.keys():
        probability=random.uniform(0,1)
        if probability>0.5:
            purchase_stock(broker)
        else:
            sell_stock(broker)

After each day of trading at the exchange, we want to print the number of shares owned by each broker in a nice fashion. Therefore, we add a method called pretty_print, which will print our the tally in a nice fashion.

def pretty_print_tally(dictionary):
    """
    Pretty prints a tally of stocks
    """
    for broker in dictionary.keys():
        print broker + ": "
        print "Equities"
        for company in dictionary[broker].keys():
            print company + ": " + str(dictionary[broker][company])
        print "#########################################################"

After ten trading days at the exchange, the standing is as follows:

#########################################################
After day 10
Laura:
Equities
Nokia: 275
Apple: 275
Google: 275
#########################################################
John:
Equities
Nokia: 50
Apple: 50
Google: 50
#########################################################
Mark:
Equities
Nokia: 100
Apple: 100
Google: 100
#########################################################

Programming Postmortem

  • No TDD! I launched straight into writing code without pausing and thinking about it. Doing TDD requires discipline and skipping on good TDD practices is not going to help develop my TDD-fu.

  • No tests whatsoever! Thus refactoring will most likely be a nightmare.

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