From the 18th to the 21st of February, BSIC represented Bocconi at the Rotman International Trading Competition. Our team ranked 6th out of 50 teams, standing out among the world’s top universities. We were indeed proud to interview them in order to get a flavour of their exciting experience in Toronto.
“What is the Rotman trading competition? How did you find this opportunity?”
“The Rotman International Trading Competition (from now on RITC) is an annual event patronized by several financial institutions that brings delegations from universities worldwide to participate in a 3 days competition at the Rotman School of Management in Toronto. We found out about this opportunity on Rotman’s website last November and decided to set up our team.
It was very difficult, as we didn’t receive any financial or actual support from our faculty, but, together with our club, we managed to build a young, strong and motivated group, with solid skills and a keen interest in the financial markets. Four of us (Alberto, Niccolò, Luca and Lorenzo) are enrolled in their first year of bachelor, while the fifth (Giorgio) is currently studying to obtain a Master of Science in Economics and Social Sciences.”
“So, practically, what did the competition consist of?”
“In the RITC, teams are confronted with six simulated trading cases that closely mimic different aspects of the real-world markets. Four of them take place in the host institution’s Financial Lab, where participants trade different instruments ranging from stocks, bonds and commodities to options. Organizers manage the trading environment from their own proprietary simulator, and participants have access to it through a client application, to which they can add their own Excel models. In the Quantitative Outcry, instead, futures on an ETF are traded with paper sheets.
Teams are divided into traders, who are in a large trading pit trying to buy and sell contracts from each other, and analysts, who are in the Financial Lab and have access to the news that influence market conditions. Traders and analysts are held separate and must communicate with each other through hand signals. Being an outcry trading case, the floor quickly becomes very noisy, and both giving hints of market moves and monitoring open position between the two groups is a very intense process.
Finally, the Algorithmic trading is the most technically challenging case: every team must build an Excel algorithm with Visual Basic that automatically makes a market of four stocks and an ETF and that adapts to changing market dynamics.
The event included many presentations held by institutions in the field (among them, Capital IQ, Reuters, BP) and several networking sessions.”
“That looks like very technical. I guess preparation must have been crucial! How did you deal with that?”
“The technical side of the preparation was definitely the hardest part, as in the meanwhile we had to prepare for all the exams, face several interviews for internships and unfortunately no professor was available to help us. We met on a daily basis and we worked long hours splitting the workload across the whole team. Two members, with strong technical and IT skills, took care of the modeling part, building every Excel model we needed and structuring the algorithm, while the remaining three elaborated the trading strategies to use in the different sessions and practiced on RITC’s servers. The key was to prepare as much as possible in advance in order to think faster, manage risks in the different cases and adapt to the fast-paced nature of the competition.”
“How would you define this experience in three words?”
“Intense, Challenging, Rewarding.”
“Do you think it was a useful leaning experience then?”
“Absolutely!
We believe that we truly grasped a lot of details and mechanics of how financial markets and stock exchanges work only by being involved in the competition. In addition, the six cases forced us to put all the theory into perspective and to evaluate which strategies might or might not work in the various product markets.
For instance, by trading Rates, we learnt how to quickly decode the pieces of news predicting how they would impact bond prices or, by trading Equities, we learnt how to manage risks coming from our position. As a result, during the competition we were 1/1.5 seconds faster than the market in interpreting news, and this gave us a great advantage. Moreover, building models and trading in the Algorithmic Trading case taught us how important is to prepare in advance excel scripts and models that are flexible and quickly adaptable to changing market conditions.
Finally, being in touch with like-minded peers coming from first-class business schools gave us the chance to discuss different topics and share our ideas, as well as improving Bocconi’s reputation in the world.”
“Would you like to participate again next year?”
“This is a real no-brainer, certainly yes!
The competition helped all of us to dwell deeper into an area of finance that we are passionate about and we will welcome the chance to challenge ourselves again and to have as much fun as we had this year. Experience, as well as analytical skills and ability to work under pressure, is the key to best prepare and to overachieve in this kind of competition. Furthermore, the workflow and the dynamics among the five of us have improved a lot: we became very good friends and we can’t wait to work together for next year’s RITC.
In 2015 we’ll be able to do an in-depth preparation based on our first-hand knowledge of the six cases. This, along with the support of both the club and the faculty, will allow us to compete for the first positions.”
“Cool! We want you to bring the gold medal home next time!! Thank you for your time!”
“We will do our best to bring you the gold medal, and the Rotman Cup.”
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