U of T’s Rotman School of Management battled “the future stars of the financial industry” in its third annual International Trading Competition last weekend.
Thirty-eight teams from 36 universities competed for a total of $15,000 in cash which was to be distributed among them based upon their performance.
Rotman challenged universities from Canada, the United States, Great Britain and the small Mediterranean principality of Monaco.
Organizers of the Rotman International Trading Competition said it takes about three months to organize the event. The team from the University of Reading took top honors taking home $2,800, followed by MIT who took home $1,800. The top Canadian team was last year’s winner, Université de Sherbrooke, who came in third and earned $1,300.
“We’re bringing in some of the top people going into the financial industry and we hope that they’ll be the future stars of the financial industry on Bay Street and Wall Street,” said Kevin Mak, manager of the Financial Research and Trading Lab at Rotman.
The 2006 competition was the most successful to date that Rotman has seen because it received the most variety and most teams ever.
The teams competed in four different cases for points. Teams received information via a custom-made e-platform called the Rotman Interactive Trader.
The first case they competed in was the Open Outcry event meant to mimic the old days of trading when traders would “cry out” their trades on the floor. Although this challenge was only meant as an “icebreaker” according to Rotman’s brochure, this colorful and very loud portion of the challenge ended up being the most fun, with one student wearing a dollar-bill bandana symbolizing his target to make the most money. It seemed to have an effect on the overall outcome of the challenge, a liquidity trading case. Teams were given an institutional order flow, and students took these flows and executed them for fictitious clients.
The second case was the Quantitative Outcry-a modified form of the first case-and the third case was the Analyst Trader where teams of analysts and traders forecasted earnings per share for fictitious companies based on historical data as well as fake quarterly earnings reports, with the “traders” following their forecasts.
The fourth case was new, testing students for their on-the-spot decision making abilities, mimicking the process that thousands of liability traders follow when competing to fill orders from buy-side institutions.
