Over 100 of the brightest student minds from universities across the country gathered at downtown Chicago’s Gleacher Center on March 15th to compete in the 2nd University of Chicago Midwest Trading Competition.
Once again powered by OptionsCity’s engine for trading automation, Freeway, the competition featured three financial trading scenarios that focused on markets, high-frequency exchange arbitrage and managing a large options book [with risk limits], for which 26 participating student teams developed strategies.
In addition to OptionsCity, this year’s event had a litany of sponsors including DRW Trading, Allston Trading, Flow Traders, IMC Financial, Optiver, SBB Research Group, Spot Trading, Geneva Trading, Wolverine Trading, BP, Volant Trading, as well as CME Group, and Eurex.
UChicago Careers in Business: Financial Markets Program Director Darrell Zechman facilitated the event for undergraduate students. The event once again showcased the city; “It’s really about the robust financial community in Chicago” Darrell noted in his opening remarks.
Andrew Lisy, Algo Product Manager for OptionsCity, opened with an introduction of OptionsCity and a presentation of “Why is the Market Paying You?”, discussing at a high level leverage, commoditized latency, data, and technology risk while drawing relevant comparisons to the three case scenarios.
OptionsCity’s Senior Software Engineer Benjamin Sandmann also discussed the background of how the firm worked closely together with the University of Chicago to set up, code, and test within the Freeway system which ran the scenarios.
UChicago students developed the cases which included a mathematical modeling case, a high-frequency exchange arbitrage case, and a portfolio case for managing a large options book [with risk limits]. Ben gave an overview of how the coding structures and processes culminated into the day’s competition, touching upon threading, parallelization, and event handling.
“This is a way for students to be programmatically challenged,” he explained. “The Freeway system allows you (the students) to focus on what you do best. Instead of getting lost in complex threading and system logic, you can instead focus only on trading logic, hedging, and managing risk.”
Ben was instrumental in the knowledge transfer required in bringing the student teams up to speed on best practices and coding logic for Freeway in the weeks leading up to the competition. The students who developed the cases were able to easily instruct each other on how to leverage Freeway.
The Trading Competition
With the fervor of a horse race at Arlington, PnL and average positions rapidly flashed across large screens in dynamic heat map and graph visualizations. In a process of PnL elimination with a side-by-side performance against the market, the energy in the auditorium-style room quickly increased as teams traded. Competitors cheered, shouted, and high-fived each other through the cases, mirroring the excitement of a trading pit.
“We wanted to compete in the trading competition because it was a great opportunity for us to use what we’ve learned from our internship and classroom experiences toward solving challenging, interesting, and realistic problems in trading. We were also excited to meet and learn from our brilliant fellow competitors at the contest.” commented Kevin Hu from the Harvard team. “Using OptionsCity Freeway in the competition was rewarding as we could implement our trading strategies and ideas with an actual trading platform, adding realism to the trading competition.”
Students also had the opportunity to ask questions of industry experts during a lunchtime panel session that featured OptionsCity CEO Hazem Dawani, who answered student inquiries ranging from the possibility of Bitcoin exchanges to the latency “race to zero”.
From the Gleacher Center, students could even see the Chicago River dyed green, as is the Chicago tradition in kicking off St. Patrick’s Day weekend.
Trading case performance scores were tallied prior to the evening awards ceremony, sponsored by OptionsCity and Eurex.
MIT was announced as the team performing the best across all three cases at the end of the competition, followed by Harvard and Carnegie-Mellon. These teams were awarded large cash prizes and treated to a first-class dinner to close out the very successful competition.