After a weak morning session, the Rotman School of Business stock market was exceeding all expectations last Friday afternoon. And though the action was simulated, the traders were playing for real money-$20,000 in cash prizes, spread out over several competitions.
“I just went long the whole time. I made a killing,” said Reagan Richards, from the Villanova School of Business, outside Philadelphia.
He and 67 other traders had just finished jostling elbows inside a simulated trading pit at the fourth annual Rotman International Trading Competition. The tournament brought 34 schools from Canada, the U.S. and as far afield as China and Australia.
The torrid traders were bidding on a futures contract-essentially guessing the future value of a fluctuating stock “benchmark,” which simulated a real stock market.
“Seeing the fear and emotion on the face of the traders helps them understand what drives prices,” explained James Jablonski, a seasoned ex-trader and the academic mentor of the Villanova team.
“It’s a zero-sum game,” he cautioned-or taunted. “For every dollar lost there’s a dollar gained.”
In one room, two members of each team scanned a simulated news wire for tips that might spook or cheer investors. They then relayed this information to their partners on the floor, through an elaborate system of waves and hand signals.
During “bull runs,” when the index climbed, the traders’ intensity would reach a deafening roar; during “bear runs,” the pit would go quiet as troubled traders pondered their next move.
But the pit is not likely to play a role in their future money-making endeavours.
“Outcry pits are being phased out,” explained Kevin Mak, who manages Rotman’s financial research and trading lab, and who served as one of the referees on the hectic trading floor. “Nowadays everyone just trades on computers.”
Another change: this year, far more of the traders were women, Mak remarked.
According to Cari Lynn, author of 2004’s Leg the Spread, a cheeky take on the trading pits, three kinds of women go into pit trading. There’s the women who are out to land a rich husband, the so-called “tough women” who Lynn calls as profane as truckers, and the genuinely successful ones, who earn their stripes through wit, sweat, and by steadfastly standing their ground against the chauvinists.
“Women are said to be more risk-averse,” said Maureen Farley, a third-year from Villanova, whose team was half female. “But there are some women who are every bit as aggressive as men.”
“I’m used to it. All of my friends are guys,” said Kathryn Gandolfo, a third-year on MIT’s team, and one of the loudest voices in the pit.
