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Rotman
International Trading Competition:
The
Rotman International Trading Competition (RITC) is an annual event held
in Toronto, Ontario. The RITC is hosted by the Rotman School of
Management at the University of Toronto. The competition brings teams of
students and faculty from universities worldwide to participate in a
unique 3 day conference. The RITC utilizes simulated trading cases that
closely mimic different aspects of real world markets. There are four
competitions that make up the RITC.
The
first competition is the open outcry. During the outcry market, everyone
will be trading a single index futures contract. A live news feed will
affect the underlying index and consequently, the futures prices.
Participants will be able to trade futures contracts with one another
via an outcry system. The purpose of the outcry case is to give
participants a chance to experience the frantic ambience of an actual
outcry pit, and to understand some of the basic relationships between
spot and futures markets. Past competitors have regarded the outcry
cases as the most entertaining aspect of the competition. Certain
non-trading related issues such as team communication and team
identification have led competitors to create complex signals and wear
distinguishing attire. Students will take turns being analysts and
traders in this case.
The
second competition is the quantitative outcry. The quantitative outcry
case will follow a similar form as the first open outcry case, except
the information structure will be different. Instead of getting
qualitative micro and macroeconomic news that affects the index, traders
will be given quantitative data that fits into a factor model. Weeks
before the competition, students will be given a historical time-series
of economic data and index levels for the simulated economy. This case
stresses the ability to statistically analyze this time-series in order
to determine the sensitivity of the index to each factor. During the
outcry case, news releases will announce realized and forecast economic
data that can then be used to forecast future index levels in real-time.
Students have excel models prepared ahead of time and will be able to
use laptops to calculate and project future index levels. Students will
take turns being analysts and traders in this case.
The
third competition is the sales and trader case. The Sales & Trader case
stresses the on-the-spot decision making process that liability traders
must execute when competing to fill orders arriving from buy-side
institutions. Traders will transact multiple securities on an electronic
market with one another, in an attempt to generate the most profits from
liquidity trading and commission based order filling. This case will be
broken up into two heats with two representatives from each team
competing in each heat.
The
final competition is the arbitrage pricing theory case. This case allows
students to price equities based on sensitivities to different factors.
The competitor's role will be to create Excel spreadsheets that model
prices for each equity in real-time given specific factor inputs.
Traders then need to act on price discrepancies between the observed
market price and their model prices. This case will be broken up into
two heats with two representatives from each team competing in each
heat.
Last
year the RITC was the highlight of the year for the team that competed.
Each member that went to Rotman brought back knowledge of trading,
modeling and teamwork that they were able to share with their fellow
students. The team was able to place in the top 50th percentile among
some of the world’s greatest universities such as Massachusetts
Institute of Technology and Duke University. This year we are setting
our goals a bit higher. We think that with proper modeling and coaching
by our faculty coach, as well as the Summit Fund members that went last
year, we are capable of placing in the top 30th percentile. |
