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The 2nd Telfer Trading Competition (TTC) finished off with another successful year here at the University of Ottawa with forty registered students. These students gathered October 4, 2014 to compete, work hard, and push their trading capabilities to their limits. Participants had the opportunity to practice trading financial securities, build financial models and macros, and experience the thrill of a classic trading pit. The event was a joint collaboration between the Financial Research and Learning Lab and the University of Ottawa Student Investment Club (OSIC).
Many students dedicated time to prepare and train for the different challenges within the competition. The day was tough and intense and only the most prepared participants were able to emerge victorious and outperform their peers for a prize pool totalling over $800. The top six students measured by the aggregate results of all the cases, won cash prizes ranging from fifty to two-hundred dollars. There were also cash and prizes given to the winners of each of the five cases. However, the students were seeking a much greater prize as a result of the competition.
The competition was the only opportunity to try out for this year's Rotman International Trading Competition team which will go to Toronto to represent the school in February of 2015. Only six very exceptional students from the University of Ottawa are chosen for this prestigious competition each year, and the Telfer Trading Competition was the selection platform for it. The structure of TTC was designed to help identify ambitious, skilled, and driven candidates for the University's RITC team. The top twelve ranking students were given the opportunity to formally apply. Their rankings, along with their CV, cover letter and a formal interview will be used by the final selection committee.
The event began in the large conference room in Desmarais where students were welcomed and given a brief introduction. Shortly after, students began to clear their throats and ready themselves for the social outcry portion of the competition. This segment resembled an olden day trading pit where individuals were required to wave their arms and yell their bid and ask orders. Participants traded on the Telfer-500 index; a simulated index created by Alex Tyutyunnik who is a recent Telfer alumnus and now an employee at TD Securities in risk management. Alex made the trip down from Toronto for the competition and helped tremendously in preparation and acted as key administrator in running the event. The Telfer-500 index was programmed to frequently produce news that would drive the index price up and down. The charts and news updates were displayed on four massive projections located on all surrounding walls of the conference room. Students needed to successfully interpret the news, and make investment decisions based on their findings. Once a student found a counterpart for the trade, they then needed to confirm the transaction on an order sheet and submit it to the designated market makers. Liquidity could only be created through the transactions of buyers and sellers within the trading floor, so competition was fierce.
After the social outcry portion, students transitioned to the computer lab for the case-based segment. This second portion was focused on utilizing an order-driven market simulation called Rotman Interactive Trader. The cases consisted of a Dynamic Order Arrival case, Microstructure Capstone case, Commodities Capstone case, and finally an Algorithmic Arbitrage case. Every single scenario offered a new category that required a different skillset, trading style, and risk adaptability. Each case contained three rounds which lasted between five and ten minutes. As trading went live, you could hear students yelling and cheering as they watched their profits go up and down. When volatility swept the screens of all the traders, you could sense that the atmosphere in the room had changed with unease. All traders were glued to their screens watching for any indicators of price fluctuation or news. Students needed to focus and pay full attention to any opportunities for capital gain. Every second was valuable, and the ability to take advantage of those seconds meant even more. The energetic environment closely resembled the hectic nature of a trading floor.
Half way into the second part of the competition, coffee was served and students had the opportunity to take a break and chat with their peers. After the break had ended, students went back to their trading stations and began to prepare for the final case – Algorithmic Arbitrage. For this specific scenario, participants were required to pre-construct an algorithm on Excel VBA that would take advantage of the price discrepancies between the same security which traded two different exchanges. When the case went live, students were required to stand back and watch while their algorithms battled it out.
The simulation-based concept proved once again to be a great learning experience for any student wishing to pursue a career in the financial markets. The style of the competition allowed students to practice making optimal decisions based on unexpected circumstances and scenarios. The hands-on experience offered in this event would not have been possible without educational resources like the Financial Research and Learning Lab. The lab is always working towards providing students with more opportunities for growth, self-development and achievement. In order to make these competitions more rewarding and fulfilling in the future, the Financial Research and Learning Lab will continue to work on projects with student clubs like OSIC. It is said that planning for the 3rd Telfer Trading Competition is already underway for January 2015. However, the next one is rumoured to be on a whole different scale!
The day's winners were as follows:
Social Outcry Winner: Cassy Aite
Dynamic Order Arrival: Talib Sadat
Microstructure Capstone: Daniel Shannon
Commodities Capstone: Ethan Zhang
Algorithmic Arbitra: Ethan Zhang
Photo: Cassy Aite (Centre), Alex Tyutyunnik (Left), Pouya Safi (Right)