In the Financial Research and Trading Lab, students get first-hand experience of financial trading through simulated modules.
“Sometime professors simulate a crash,” said Kevin Mak, manager of the lab. “The students’ faces just go pale. There’s a few tears.”
The lab, located on the second floor of the Rotman School of Management, is being expanded thanks to a $2.5 million donation from BMO Financial Group announced last month.
About a third of the donation, $750,000, will establish the BMO Financial Group Access to Higher Education Awards. The needs-based program will award scholarships to graduates of academic bridging programs — ones that serve marginalized, disadvantaged people lacking normal university entry requirements — who are accepted into undergraduate studies in the Faculty of Arts and Science.
The remaining $1.75 million will be used to renovate the lab which will then be called BMO Financial Group Finance Research and Trading Lab. The lab is a room with 35 double-screen workstations, two real-time stock tickers, televisions, and projection screens. Professors of business and commerce courses create multiple scenarios, allowing students to test their knowledge and skills in a spontaneous environment.
“It’s like a flight simulator. If you’re a pilot and you come up against a mountain, you don’t want [to experience] that in real time, you want to have a kind of strategy to use,” said Thomas McCurdy, academic director at the lab.
“They use their theory … they figure out things that work systematically and we so teach them how to do finance when the future is uncertain,” he said.
Mak says roughly 1,500 students use the lab for coursework each year, and that it’s popular with students completing research and clubs holding trading competitions: so popular that 35 workstations hasn’t been enough. McCurdy said he’s anticipating an extra 30 workstations.
“We get so many schools around the world who want to come, but we’re sort of limited,” he said. “This will really help.”
The lab will be expanded and take over the current Business Information Centre library. A trading pit for open outcry trading — like the squabbling NYSE traders seen barking commands to analysts — is in the plans.
“The University of Toronto is a stellar institution,” said Ralph Marranca of Corporate Media Relations at BMO Financial Group. “We have enjoyed a longstanding partnership, working with them to enhance the student experience.”
“In everyday simulation, [a student] always wonders how accurate it is,” said Mak. “So having a big investment bank sponsor it adds legitimacy and show what trading is really like.”
In 1993, the financial group established the BMO National Scholars Program with a $3 million dollar donation that was matched by both the university and the province. The donation is part of Rotman’s $200 million fundraising campaign, as well as a wider U of T fundraising campaign in the works.
