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What are the rules for creating portfolios for stock contests?

In order to legally offer stock picking contests to our users, DIYSE is required to ensure that there is a minimum amount of diversification and trading volume in each contest portfolio. We have worked with federal regulators on a set of diversification and trading volume requirements to ensure that our contests really test both the stock picking and portfolio building skills of our users and make it harder for people to win based on a single lucky guess about an obscure, thinly traded stock.

To that end, we have created two stock selection universes – the DIYSE 600 and the DIYSE 5000. In some contests, we require all contestants to utilize the same stock selection universe, but in most public contests we will allow users to determine which selection universe is most advantageous for them given their favorite picks.

The DIYSE 600 is a list of 600+ high volume and high market cap equities that require less total portfolio diversification to constitute a valid contest entry. Using only stocks in the DIYSE 600 lets you allocate up to 90% of your portfolio to your top 3 stocks.

If your research indicates a large potential move in a stock that is not on this 600+ company list, you are free to choose from the entire DIYSE 5000, but will be required to diversify the portfolio more to create a valid entry. If you have any stocks that are not in the DIYSE 600, your maximum allocation to your top 5 stocks is 60%, and the lowest weighted component stocks comprising, in the aggregate, twenty-five percent of the index’s weighting have a sufficiently high average daily trading volume. Stocks with less than $100,000 in average daily trading volume may not be used in portfolios and are removed from the DIYSE 5000.


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