By: Will Calhoun
As a sophomore studying Quantitative Finance at the Howe School I’ve been able to participate in some unique hands-on experience. But just recently I got to enjoy one of the most opportunities, probably in my lifetime, as the team leader with fellow classmates in a global trading competition.
Students from around the world have the chance to compete in a challenging and prestigious CME Group Commodity Trading Challenge each spring. In the competition undergraduate and graduate students try to create the highest yield on crude oil, gold and corn futures in a simulated trading environment on a real-time professional trading platform provided by CQG. The four-week electronic trading competition awards cash prizes and unique CME experiences to the winners.
This year the Howe School, advised by Professor Eleni Gousgounis, was among 320 teams representing 179 schools from 26 countries to compete. I, along with Ilya Bezdetko, Chase Greenberg, Taylor Jeziorski and Viralsinh Solanki represented the Howe School. In the challenge teams receive $100,000 in virtual money to make their trades for round one. Teams that perform well can move into the final round in which they get another $250,000. We placed 9th in the first round and 25th overall. We traded crude oil and gold only because we didn’t think corn futures were volatile enough.
We were very happy with our preliminary position and made 40% in two weeks. If you blow that up to an annual return its 2,000%. But we were very disappointed in the second round. Toward the end we were in sixth place and we were up to $275,000 but due to a trading glitch we lost about $100,000 and couldn’t recover.
Still, our team made the top 10% and with it an invitation-only day at CME for the Day of Market Education in which we toured the CME Global Command Center and trading floors and participated in an Open Outcry Trading Simulation. It was a great experience and one that also helps in the classroom – not only from what we learned by giving us the chance to earn 10% of our final grade from this once-in-a-lifetime experience. Here are some thoughts from my team members, too:
Viralsinh Solanki, Junior, Quantitative Finance
Having the chance to go to the CME was a once in a lifetime opportunity. The Day of Market Education was filled with information I had not known before. My favorite part of the day was the open outcry simulation. It was interesting to see in person; traders using traditional techniques to trade which I have not seen before. When I had the chance to do that myself in one of the real pits, I was overwhelmed with excitement. We were also lucky enough to be there on the day when gold dropped a tremendous $70. It was fascinating to see people trying to figure out why gold had made that kind of a move.
Taylor Jeziorski, Sophmore, Quantitative Finance
My visit to the CME Group in Chicago was a fulfilling and memorable experience. The day began with a breakfast at the CME Group headquarters. We were fortunate enough to have CME Group CEO Phupinder Gill come and speak to us. After breakfast, we met with various CME Group employees who gave us presentations about the company and its role in the financial industry and the world. In addition, we toured the Global Command Center which was a great experience. One of the highlights of the day for me was when Rick Santelli from CNBC spoke to us during our lunch. It was awesome to listen to him speak passionately about the trading challenge and the current state of the economy. After the bell rang and trading closed, we had the opportunity to tour the floors of the CBOT. In fact, we were lucky enough to participate in an open outcry trading simulation. This was a fun yet challenging experience. It was a great opportunity to get an idea of what the day of floor trader is like. The day ended with a dinner reception at the Willis Tower. I enjoyed every moment of the day. It was a great learning experience. I strongly recommend that every student take advantage of this opportunity if it ever arises. It certainly is a once in a lifetime experience.
Chase Greenberg, Sophmore, Quantitative Finance
The trip to the Chicago Mercantile Exchange was an amazing experience for me and my fellow group members. Arriving the day before, allowed us to explore all that Chicago had to offer, including the scrumptious deep dish pizza and Navy Pier. Friday, we had the opportunity to take part in the CME’s Market Day of Education, due to our high ranking in their trading challenge. We had the chance tour the CME Global Headquarters, listen to the CEO of the CME group, Phupinder Gill, learn about the future of CME as a whole, and explore the Global Command Center. Exploring the Global Command Center proved particularly exciting for myself and the group, seeing that gold and Bitcoin were actively crashing. It was very intriguing to see how quickly things can change in the market and how much stress and scrutiny traders face when a client is pushing to sell shares quickly.
For the remaining part of the day, we visited the Chicago Board of Trade to meet with CNBC correspondent Rick Santelli and partake in an Outcry Trading Simulation. Mr. Santelli provoked an intriguing conversation on the economy and his views on life. The presentation by Mr. Santelli far exceeded my expectations and made the visit to Chicago extremely inspiring. The Open Outcry simulation posed some trouble for us novice traders. The pits are daunting and confusing at times and having the chance to watch the professionals make their trades was a humbling experience. I did not realize the amount of work that goes into a pit trader’s job, from using the hand signals to facial expressions. Overall, traveling to the CME Group was an incredible experience, from being down in the pits, to seeing one of my idols speak, or to yelling out orders in the simulation. I am very appreciative for the trip that Stevens Institute of Technology made possible for me and my teammates.