Fairfield University's business students compete in 2009 Rotman International Trading Competition in Toronto
(Posted on May 15, 2009) Like his colleagues at Fairfield University's Dolan School of Business, Dr. Michael Tucker, professor of finance, believes students learn best by doing. To teach real-life lessons in trading, Dr. Tucker takes a group of business students in his "Financial Modeling" course to the Rotman International Trading Competition in Toronto where they compete against universities from all over the world.
Hosted by the Rotman School of Management at the University of Toronto, the simulated trading competition was held in the heart of Canada's financial district, in downtown Toronto. Canada is a major energy exporter; both oil and natural gas and currently under development, oil from oil shale. The annual event brings together student teams from Harvard, the Massachusetts Institute of Technology and other prominent schools in a unique three-day learning experience.
Gerald Adams, a Dolan School graduate student from Ireland, took part in the most recent Rotman competition. He said it featured "high end teams" vying to produce the best returns on stock and bond trades. "Students were from the top schools in the U.S., England, Ireland and Australia. This gave it an air of a really intense global contest with raised stakes."
The five trading cases presented to students closely mirrored different scenarios of real world markets. They included the "sales and trader case" which had students trading different securities with changing volatilities and correlations. The "credit risk case" was based on trading bonds with different ratings and risk of bankruptcy, while another case had students trading futures. The "quantitative outcry" contest had two Dolan students referring to a financial model they built in class signaling the other Fairfield team members to buy or sell. Brad Charette, a finance and accounting major, said, "My favorite case was ‘open outcry,' which was reminiscent of how trading is still done on the floor of the Chicago Mercantile Exchange, with people shouting bid and ask prices and working in teams. It was exciting. They no longer trade that way on the New York Stock Exchange floor, where it's now all done electronically."
Lauren Bevilacqua, a senior, said, "I learned a lot about my own capabilities to take risk. I also was able to apply concepts from my finance classes since each case exposed me to a different aspect of finance."
The students didn't win, but that wasn't the point of the trip. Dr. Tucker said that the Rotman experience integrated financial theories and reinforced classroom lessons. The trading cases they had to contend with were relative to current market trends, Dr. Tucker emphasized. "It was a good opportunity for students to learn the importance of teamwork and a fast changing environment, something they will need to grasp working in the financial sector."
Matthew Reibl, a senior from Seattle, Washington, said, "It was the best experience possible. Trading is not what I'm going to be doing for a career, but I took things from it that will help me in corporate finance. It was about using critical thinking skills, being prepared and landing on your feet."
The Dolan students gave high marks to Rotman's sophisticated software, which they found similar to software used in the Dolan School's Business Education Simulation and Trading (BEST) Classroom. Called Rotman Interactive Trader, the software simulates a stock exchange, allowing users to transact financial securities with each other on a real-time basis. Students were able to see each step of a transaction process occur as they submitted their orders to the market and traded with one another.
"We were already exposed to trading software at Fairfield, and we were one of the few schools competing who have it," Adams said. Charette added, "In Toronto, what we learned in class was tested and it all came together. It was an amazing experience."
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