The CME Group Commodities Trading Challenge invites college students to participate in its annual trading competition. Over 1,000 participants in over 200 teams from more than 50 schools will fight for the big prize money and internship in a mock-trading competition that mirrors the high-stakes dynamics of trading commodities futures contracts. The concept is to devise a competition that more closely resembles the experience of a real-life energy trader and risk manager that would include both the trader employed by an energy company as well as the trader on the floor of the exchange. This two-tiered competition will give students an introduction to the full spectrum of the trading experience, from being a customer initiating a trade by making a decision to being the floor broker who fills the customer’s order. It will give the participants a cohesive introduction to the world of energy trading and hedging in a real world setting.
CME Group Commodity Trading Challenge
Phase One – Electronic Trading
Each team consisting of five members is given $100,000 of “money” with which to trade crude oil and gold futures. Each team will be equipped with CQG charting and trading platforms. Students will be responsible for setting up a team to trade the account and for determining who has authority to place the trades and how trading decisions will be made. There are many ways that students organize their team, but many decide to have no more than two “designees” who have authority to execute trades in order to reduce confusion.
During this phase, students experience real time, electronic trading on the CQG Trader platform. Students will be able to learn the techniques to trading crude oil and gold futures. A percentage of teams with the highest account balances at the end of the Preliminary Round will advance to the National Finals Round. The national champion will be determined by the team with the highest account balance in the National Finals Round. In the previous years, the winning team received scholarships as well as a chance win an internship in New York at the New York Mercantile Exchange.
Phase Two – Open Outcry
The Finance Association at the University of Houston will host an Open Outcry Competition which will be held on the main campus at the C.T. Bauer College of Business. The students at the university have hosted this competition for the past 11 years. The Finance Association Houston Open Outcry Competition is a simulated trading competition where student competitors are expected to fill hypothetical buy and sell orders on behalf of their clients, similar to how the traders on the Chicago Mercantile Exchange floors operate. Participants will be judged on how well they execute their customers’ orders.
Our mission is to provide participants with a valuable supplement to the Finance program, involving a greater understanding of financial markets beyond their textbooks, and creating a student network that will offer solidarity, leadership, and career opportunities. The students will have a chance to connect what they learn inside the classrooms, and apply their knowledge in real life situations that exist in the trading world. Additionally, our intent is to provide an effective communication link between the business community, our student members and the university faculties to enable our members as they endeavor to locate and obtain positions in the field of Finance.
Our competition was a roaring success last year with over 100 registered participants and over $3,150 awarded to the top 10! We expect an even greater success next year as more universities realizes this great opportunity for their students. The Chicago Mercantile Exchange is a large adherent of this event, helping to structure these competitions for both this year and previous years.
If you would like more information, please also visit www.cmegroup.com/tradingchallenge
