Students learn about the real life of a commodities futures trader in international competition
Posted: 03/14/2014
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UPDATE April 1, 2014: Read an interview the CME Group, sponsor of the trading challenge, had with the UTPA team adviser Bruno Arthur.

Eric Muñoz calls the hands-on experience in commodities futures trading he is getting at The University of Texas-Pan American "very real."

"Maybe one day, the money will be real too," said the computer information systems major who recently participated in a futures trading competition through the University's Department of Economics and Finance in the College of Business Administration (CoBA). "I went from just hearing about the markets to actually trading in the markets. It can be very life changing and mind opening."

Three UTPA student teams recently fared well in the 2014 CME Group Trading Challenge, an international futures trading competition for college students. Pictured front, left to right, are Cristhian Melladocid, Sergio Garcia, and Mohammad Nejad (all Graduate Student Team members). Pictured rear, left to right, are Erik Munoz, Raul Aldape, and Juan Rosales (all Rio Grande Valley Team members); Dr. Bruno R. Arthur, lecturer, Department of Economics and Finance; and Luis Basurto and Curt Muller (both UTPA Bronconomics Team members). Missing from the photo are UTPA Graduate Student Team members Kenny Ozuna and Hamidreza Sakaki; UTPA Bronconomics Team members Ramiro Flores, Christopher Villarreal and Luis Perez; and UTPA Rio Grande Valley Team members Gilberto Celedon, Juan Rosales and Armando Valero.
Muñoz is a member of one of the three UTPA student teams - one graduate, two undergraduate - that recently challenged more than 385 teams representing 208 universities from 32 countries in the 2014 CME Group Trading Challenge. It was the first time a UTPA team entered the challenge, a global competition sponsored by the CME (Chicago Mercantile Exchange) Group, one of the world's largest options and futures exchanges.

The student competitors used real-time market data, trade routing and technical analysis tools to execute simulated orders. Each team began the competition with virtual account balances of $100,000 and had to execute a minimum of five trades per day on futures contracts across a range of asset classes. The top 10 percent of the competitors, based on having the highest account balances in the preliminary round, advanced to the final round, with the chance to win bragging rights and cash prizes for each team member.

All three UT Pan American teams were among the 39 teams advancing to the championship round. In the practice and preliminary rounds, the three UTPA teams went up against teams from top universities, such as Cornell, Texas A&M, New York University, Duke and the London School of Economics, among others. Those teams advancing were also invited to attend the CME Group's Day of Market Education in Chicago on April 11, 2014, where the students will participate in education sessions by industry experts and an open outcry simulation on the CME trading floor as well as attend a networking reception with representatives from leading financial institutions.

In the championship round, UT Pan American's graduate student team placed 8th defeating teams from schools such as Boston University, Temple and Purdue University. The two UTPA undergraduate student teams - UTPA Bronconomics and UTPA Rio Grande Valley - placed 23rd and 28th, respectively. Cash prizes went to the members of the top four teams. A team from Universitat Politècnica de Catalunya in Barcelona, Spain placed first in the championship round.

"This is a tremendous and momentous achievement for a Minority Serving Institution such as UTPA that participated in this world wide prestigious competition for the first time," said Dr. Bruno Arthur, a lecturer in the Department of Economics and Finance at UTPA.

Arthur, who had several students in his portfolio management course participate in the challenge, said competing in challenges like this one gives students a life changing experience.

"The students get the opportunity to relate the real life set up with their academic experience. The graduate students also get the opportunity to test their theoretical knowledge with real time data," Arthur said.

Department of Economics and Finance Chair Dr. Alberto Davila said participation in the competition is another example of the department's efforts to have UTPA students engage in real-world activities to broaden their educational experiences.

Last fall, for example, 27 UTPA students organized into nine teams of three students also performed well in The Stock Market Game, a financial market trading simulation and competition. Coached by CoBA faculty, the nine teams played in a bracket with 11 University of Texas School of Law teams and one Tulane University team. One of the nine UTPA teams - the UTPA Rio Grande Valley - ranked first overall at the competition's end achieving a 9.96 percent return above the S&P 500 Growth benchmark.

Ph.D. candidate Sergio Garcia, who was a member of the UTPA graduate student team placing 8th in the CME challenge, said that the competition experience was an eye opener.

"Between being able to use top of the line trading software and simply watching the derivatives in the commodity market move, our appreciation for the complexity of financial markets has expanded exponentially," he said. "It is far too easy to vilify the 'Wolfs of Wall Street' without having a basic understanding of what real traders actually do on a daily basis. This contest gave us a glimpse of that world and it is clear that it is a complex, interconnected, internationally intrepid work that moves faster than any one person can grasp with confidence."

Learn more about the competition at the CME Group Trading Challenge website. Go to the CoBA website to learn more about its undergraduate and graduate programs.