On the Trading Floor

17 Mar, 2012

[media-credit name="Daichi Ishikawa " align="alignright" width="300"][/media-credit]

The MIC Trading Simulation hosted 200 students from fifteen universities across Canada

The McGill Investment club held a stock market trading simulation on Saturday, March 10th, where teams competed all day to earn the best return on their portfolios. Trading commenced with a short pre-trading period, where traders setup their original positions. This was followed by four trading quarters.

The event was organized by the McGill Investment club, and is ranked as one of Canada’s largest trading simulations. The simulation hosted 200 participants from fifteen universities across Canada. BMO Capital Markets and National Bank were the event’s main sponsors. Mohammad Awada, Chairman of the McGill Trading Simulation, told The Bull & Bear that this event was one of the biggest the club has ever seen. According to Awada, the most exciting aspect of organizing the event was “working with such an incredible team on a day-to-day basis, and getting to know new people following a busy recruitment season.”

Each student or trader was handed a $200,000 portfolio, and was provided with a rule book and basic information on the virtual stocks created for the competition. The handbook also contained a list of forecasted press releases and breaking news stories concerning various firms. These breaking news stories were released throughout the day, essentially driving supply and demand of the trades. Once lunch was served, the pre-trading session ended, and the madness began with the ringing of the NYSE bell.

The ten traded securities varied vastly along the industry spectrum, from consumer products to biotechnology and health care. Traders stood shoulder-to-shoulder with their trade stubs, ready to buy and sell. After every news release, traders, depending on their position, expressed either a thunderous cry of joy, or a loud expression of disappointment. Either way, emotions were high on the trading floor as prices shot up and crashed.

A big winner of the day was NRP, a utilities-natural gas company who proved to be a huge gain for anyone who went long on the security, as it gained roughly $30 on the day. As the fourth quarter drew to an end at around 4:30, the bell rang, trades were tallied, and reports were printed.

The winners were announced shortly afterwards. The team from HEC emerged victorious, amassing the highest return on the portfolio. Two teams from Queen’s University came in second and third place. The top individual trader, David Kong, also a student from Queen’s, won $1,000 as he managed to triple his portfolio. The McGill Investment Club awarded $2,000 to the top team, and $1,000 and $500 to the second and third teams respectively.

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