Just as marathon runners condition their bodies by building mileage, market speculators and hedgers use trading simulations to practice and improve their decision-making mindset.
This fall Bank of America (BoA) securities director Max Lee, statistics professor John Dobelman, and graduate student Yushan Liang spurred student teams from the Computational Finance (STAT 482/682) and Quantitative Finance (STAT 499/699) classes to participate in the Chicago Mercantile Exchange Group (CME Group) University Trading Challenge.
The annual virtual trading competition stretches 20 days (four trading weeks, Sunday through Friday) and involves about 2,000 students from up to 500 schools around the world. This was the first year that Rice and the Center for Computational Finance and Economic Systems (CoFES) competed in an organized fashion. Rice had five student teams made up of 15 undergraduates and 5 graduate students. Another Rice team not affiliated with CoFES also participated.
“Learning to be a good investor is a never-ending process, and part of that skillset includes trading. In recent years, virtual trading platforms have become a great training tool that reinforces curriculum while fully engaging students as they build and execute their investment strategies,” said Dobelman, a professor in the practice of statistics, associate director of CoFES, and program advisor for the Professional Master’s Program in Statistics.
Working in teams of three to five people, the students were given $500,000 in simulation money to navigate the markets. While honing their skills across all major asset classes on CQG's real-time professional trading platforms to simulate trades on the CME Globex platform.
“I’m happy so many students were willing to make the extra commitment. They logged in a lot of hours, but came away with sharper knowledge,” said Lee, who in addition to co-teaching with Dobelman at Rice, leads Bank of America’s commodity and Forex (FX) systematic strategy and index trading team in the development of tactical and systematic hedging strategies.
“In addition to advancing our curriculum, virtual trading advances CoFES quantitative research ideas as the platform allows us to dissect and analyze data, risk factors and market phenomena,” added Dobelman.
For his spring semester’s Market Models (STAT 486/686) course, Dobelman will be working with CME Group’s education manager Bob Guardi to incorporate the virtual trading platform into the curriculum.
A cash prize of $500 was awarded to the top three performing Rice teams in the 2022 university trading challenge.
- Team 4 – led by Marco Stine, a junior majoring in computational and applied mathematics with a minor in financial computation and modeling, also included Can Erdogan, a senior statistics major with a minor in data science, and Eisha Hemchand, a sophomore majoring in computer science.
- Hermann Park Trading – led by Kaichun Luo, a senior majoring in computer science and mathematics with a minor in financial computation and modeling, also included Jiaqi Lu, a senior majoring in computer science and statistics with a minor in financial computation and modeling; Cheng Peng, a senior majoring in computer science; Zouyi Sun, a senior majoring in statistics with a minor in financial computation and modeling; and Xiaoqi (Chelsea) Zhao, a senior majoring in statistics and mathematical economic analysis.
- RH400 – led by Yushan Liang, a master’s candidate in engineering management and leadership, also included Hongjin An, a master’s candidate in statistics; Shengyu Yang, a master’s candidate in computer science; Xianyin (Gary) Liu, a master’s candidate in chemical engineering and in business administration; and Yuxin Tang, a doctoral candidate in computer science.
Additional Rice undergraduate teams included:
- Team RC – led by Hamza Shili, a sophomore majoring in computer science and mathematical economic analysis, also included Eleazar Martin, a sophomore majoring in statistics; Sage Sabharwal, a junior majoring in economics; and Sophia Rebello, a sophomore majoring in computer science.
- What Risk? – led by Will Doherty, a junior majoring in mathematical economic analysis, also included Matthew Edelstein, a sophomore majoring in sport management, and Sol Kim, a junior majoring in operations research.
- Shawn Hutchins, Communications and Marketing Specialist
