Driving to work the other day, I was listening to CNBC on my satellite radio, and I heard (for what must be the 40th time this week) that CNBC is sponsoring its "Million-Dollar Portfolio Challenge."

I got to thinking, "Hey, what's the strategy for actually winning this thing, or placing second-best? How can I share the information with as many readers as possible, so that I increase my chances of winding up in some rich person's will?"

So here's the information that I think will help improve your chances of winning (cue the drumroll, pause for effect, and zoom into the face of Dr. Evil) ...

One MILLION dollars!

(Sort of.)

Sort of?
Although this contest is advertised (and it's a pretty advertisement!) as carrying a $1 million prize, the fine print reveals that it will be paid out over 25 years as an annuity. It has a net present value of about $617,000. After taxes, it's probably worth a bit less than half a million. Definitely less if you're paying income taxes in the District of Columbia. Still, let's be sporting and round up to $500,000.

According to Wikipedia, 150,221 people entered last year. Given increased familiarity and more promotion, I'm guessing there should be 200,000 to 250,000 entrants this year. All things being equal, you've got about a 1 in 225,000 chance of winning this lottery.

But all things are definitely not equal in this game. Playing the right way, I think you can increase your odds.

Lessons from last year's winner
To promote the contest on its website, CNBC demands that you ask yourself: "Is Your Investment Strategy Worth $1 Million?" But, as you'll see, this contest has stunningly little to do with "investment strategy," and everything to do with maximum risk-taking.

Consider that last year's winner turned the notional $1,000,000 that a contestant starts with into more than $5 million in a period of only eight weeks.

Now, you might think that the winner must be a heckuva investor, which he might be. But according to MSN Money, his strategy was, after a good initial run of trading his way from the notional $1 million to $2 million, to put his whole "portfolio" into one stock.

Escala, if you can believe it. Yes, the winning "investing strategy" was to go all-in on a scandal-ridden fiasco of a company -- one that has subsequently seen its management group indicted, and the bet (no one would call it an "investing strategy") was made at a perfect moment as the stock recovered a portion of its price -- briefly, as things turned out.

Now, taking all of an actual $2 million portfolio and investing in a company embroiled in a Ponzi scheme investigation is reckless stupidity of the highest order. But within the context of an online stock-trading contest, where the winner gets a huge prize and the other couple hundred thousand players get nothing, it's brilliance.

That's because doing anything other than the riskiest thing possible with your play money is just accepting a loss. Somebody out of a couple hundred thousand people is going to at least triple his or her money over the course of the game. There's no real money to lose with a bad bet, and everything to gain by catching lightning in a bottle. Or if not everything....

One MILLION dollars!

(Sort of.)

Where's this year's Escala?
In this game, you really want to be "invested" in one or two stocks at a time. You'll do well fishing around the lowest market cap the game allows ($500 million), seeking stocks with high betas or other indicators of extreme volatility, and prices in or near the single digits. Popular, volatile stocks where emotions run high on both sides -- Rambus (NASDAQ:RMBS), Advanced Micro Devices (NYSE:AMD), or Apple (NASDAQ:AAPL) -- seem like good choices for the game, but really are too big to make the jumps you need. The chance that these three stocks could double quickly is infinitesimal.

Far better companies would be ones like CMGI, with a market cap of $600 million and a share prices less than $2. Sirius Satellite (NASDAQ:SIRI) has the right share price, but the market cap is bigger than I'd like. Ballard Power (NASDAQ:BLDP) is a pretty good choice, but I'm not sure what the definitive catalyst would be over the limited time period that the contest occurs.

I do know of one, though, that is virtually certain to take a violent move up or down during the contest.

All or nothing -- scheduled for March
(NASDAQ:AGIX) is a stock tailor-made for this game. I learned about it from Charly Travers, our resident Rule Breakers biotech guru. It's a company with essentially all its eggs in one basket -- the drug AGI-1067, a coronary artery disease treatment, is in phase 3 clinical trials in co-development with AstraZeneca (NYSE:AZN). According to the company, test results are due out in early March, and there is a huge market opportunity for the drug -- if trial results are successful. According to Charly, after results are announced, the company will either be worth much, much more, or perhaps as much as 70% less -- immediately.

Hey, that's perfect! If the trial results are announced in early March and come in positive, you'll be virtually guaranteed a spot near the top of the pile. And if it misses, you won't have to worry about the rest of the contest. You'll be out of the running quickly, with no real money ever lost.

Now, there are only two drawbacks to using Atherogenics -- at a market cap of $480 million, the company is just shy of qualifying for the game at today's price. Also, the trial news could be released just before the contest starts on March 5.

But even if AtheroGenics releases early, there are other companies in the same vein. So if you hope to compete in CNBC's game, that's my advice to you: Find a small, volatile stock with a potential catalyst coming in the next two months. It's not a good bet in real life, but it's your best bet to win ...

One MILLION dollars!

(Sort of.)

Our Motley Fool CAPS research service might be a good place to hunt for such a stock. Click here to sign up for free.

Bill Barker wants to send a shout-out to CNBC's Mark Haines for his years of professionalism. Bill owns shares of no company mentioned in this article. The Fool has a disclosure policy.