CNBC has been conducting a $1 million Porftolio Challenge. Anyone can enter as many portfolios as they desire for free, with the grand prize being $1 million.
However, there seems to have been a problem with this challenge.
A trader could go to the CNBC Web site and select a number of stocks to buy, but hold off on executing those trades. If you made the selection before the close of regular trading at 4 p.m. EST and left your Web browser open, you could execute those trades after hours and still receive the 4 p.m. closing price. For example, if a company whose stock closed at $20 a share rose to $25 in after-hours trading, you could buy the stock at $20, even though it was already worth 25% more.
This despite rules that traders are not allowed to execute after-hours trades.
The top four portfolios seem to have made use of this loopholes. With this strategy, they have booked phenomenal returns.
Over the first nine trading days of the final round, the top five stockpickers tallied average returns of 45%.
More at Businessweek.