Trade Talk Blog: University of Chicago Midwest Trading Competition: Making it Real


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Trading Technologies recently provided the trading platform for the University of Chicago Midwest Trading Competition. The event centered on algorithmic trading and attracted students from some of the most prestigious universities in the U.S. and Canada.

At the center of the competition was the TT® platform, including our visual programming interface, ADL®. While this was the fifth year for the annual competition, it marked the first year of our involvement. The organizers approached Trading Technologies last summer and told us they were looking to improve the event. In particular, they wanted a new trading platform that could make the competition realistic, providing students with an experience that truly replicated how the markets operate.

Of course we eagerly agreed to become the competition’s lead sponsor and platform provider. As a result, the students learned how to use the TT platform. They developed critical real-world skills using the same software and markets that professional traders around the world use every day, learning how to design and deploy trading strategies against real market prices, not simulated markets or products.

The competition centered around two case studies, which were given to the teams in early March. The first case study required students to design a pairs trading algorithm that trades based upon the correlation of Treasury futures prices and the price of e-Mini S&P futures. The second had the students assuming the role of an options market maker in the options on e-Mini S&P futures. Both cases reflected the challenges faced by today’s traders, making the event not only realistic, but also practical.

The students spent the weeks leading up to the final event designing and testing their algorithms. But prior to receiving the cases, they were given access to the TT platform. This allowed them time to become acquainted with the markets and the software, including ADL, before they received the cases.

Since the students didn’t know what market conditions they would face, they needed to make sure they took everything into consideration. The prices used for each case were recorded during live trading to reflect real market liquidity and volatility. Furthermore, the case writers chose specific time frames where the price action would challenge the teams.

The event began with a panel discussion where firm representatives shared the paths that led them into the trading industry and provided the students with valuable advice. The sponsoring firms also staffed tables where students could learn about career opportunities and find out what the firms look for when assessing candidates.

When the competition began in earnest, the atmosphere was electric. Emotions ran the gamut as teams watched their algos run. There were seven rounds in the competition, each 15 minutes long, but I’m sure it seemed longer to the students. Between rounds, teams had the option to adjust their algos if they felt they needed some fine tuning. The firms also had a chance to interact with the students and ask them questions about their strategies.

If the competition sounds serious, it’s because it was.

Performance was measured by much more than simple profit and loss. As is the case in the real world of trading, penalties were assessed when the teams exceeded maximum positions and maximum order quantities. Teams that left open positions at the end of the trading day or that failed to satisfy market-making requirements were also penalized.

When the results were tallied, the pairs trading case winners were the University of Texas (1st), New York University (2nd) and Columbia University (3rd), with Baruch College (1st) and Princeton University (2nd) winning the options market making case.

In the end, the students told us that the competition exceeded expectations, providing an unmatched experience with exposure to real markets and real software.

“The competition was a great experience. Preparing for the cases was an excellent learning experience and a chance to be exposed to real world trading concepts.”
– Philip Chen, a computer science and engineering student from the University of California Davis

“It was really cool to trade on real market data as opposed to simulated data. It made the competition and our algorithms seem more realistic and applicable. We enjoyed the opportunities to network with people from the industry and with other students who share our interests in trading.”
– Rahul Gupta, a computer science major from the University of Texas

“Overall, the competition was a terrific experience. Our team is definitely interested in coming back next year to compete again if possible. Competing against top students from some of the best universities in the United States and abroad was a lot of fun and a huge learning opportunity.”
– Jackson Reuter, a business student from the University of Colorado Boulder

“We thought the TT platform was awesome! Having it run so smoothly in a web browser is quite an achievement. Furthermore, we learned a great deal about the trading industry, and had many opportunities to speak with professionals and recruiters about careers in trading and tech.”
– Akaash Mohan, a business student from New York University

We’re already looking forward to working with the University of Chicago team to make next year’s event an even bigger success. We’ll share the 2018 details on Twitter as they become available.

If you’re an educator who’s interested in creating a similar experience for your students, we’d like to partner with you. We can provide you with free access to the TT platform and help you design a competition for a class, an extracurricular investment club, even an intercollegiate event through our TT CampusConnect™ program.

To learn more about the program and some of the ways we’re currently working with partner schools, read the case studies on the Resources page of our website. Then contact us to see how we can collaborate on building the next generation of capital markets professionals. We look forward to hearing from you.