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ROME, ITALY – Frenzied students elbowed their way through busy open-outcry trading pits and executed trades on a proprietary stock market simulator at the first Rotman European Trading Competition (RETC) hosted by LUISS Guido Carli University in Rome.

With 26 schools participating from countries such as Austria, Belgium, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Monaco, Netherlands, Norway, Poland, Portugal, Slovakia, Switzerland, United Kingdom, the University of Toronto’s Rotman School of Management has exported a unique experience to another continent.

Modeled after the highly successful Rotman International Trading Competition, the European variant was built with the cooperation of LUISS University and the Rotman School and illustrates their commitment to experiential learning and preparing students for the competitive field of finance.

During the two and a half day event, students competed in five cases including the Enel Energy Trading Case, Bloomberg M&A Trading Case, CC&G Options Trading Case, Sales & Trading Case and Quantitative Outcry Case.

“Cases are designed to teach students about different asset-pricing and trading strategies employed in the real market. We then use simulation to create a dynamic world where any possible sequence of events can happen. It’s up to the students to have devised a proper trading strategy that considers these possibilities, execute a plan and generate profits under those conditions. We then make them do it over and over again to make sure they aren’t making money simply due to luck,” said event manager Kevin Mak, manager of the financial research and trading lab at the Rotman School.

“We consistently made around $50,000 to $150,000 in fictional profits for each of the 10 options trading simulations.  We were quite concerned when we heard the team behind us boasting about making over a million a few times. When the final scores came out, they failed to mention that they also lost a few million on a couple of the simulations. When the dust cleared, we ended up first place for the CC&G options case," said David Maher from Dublin City University, the team that was ranked 2nd overall.

Kenneth Østnes, team member from the 1st place BI Norwegian Business School added: “We invested a lot of time preparing as a team prior to the competition and worked through all of the cases and tested out the different trading strategies that we could use with each simulation. Some of our strategies tended to work very well, while others were disasters. Learning what not to do was almost as helpful as learning what to do. The overall experience was extremely satisfying since we got to apply everything we learned in our finance lectures to a real-world experience and compete against some really smart people.”

The Enel Energy trading case required students to calculate energy-arbitrage spreads between crude, products, and electricity, as well as gauge fundamental supply and demand imbalances in each of the markets. The CC&G options case challenged students to build Black-Scholes implied volatility calculators to determine mispricing and delta-neutral trading strategies. The Bloomberg M&A case involved calculating probability-weighted outcomes as they pertained to merger deals, and execute trades to profit from their occurrences. The Sales & Trader case tested students’ abilities to handle liquidity in a liability-trading environment unwinding large blocks of shares, and the Quantitative Outcry placed competitors in an environment where they had to manage analysis, risk management and trading, without the aids of electronic systems.

Across all five cases, the top five ranked schools were: BI Norwegian Business School, Dublin City University, AALTO University, KU Leuven and University of Augsburg. For the full scorecard in detail, please visit the RETC

RETC was spearheaded by Professor Emilio Barone of LUISS and co-organized by the LUISS Blue Team, comprising Aldo Ballarini, Alessandro D’Atri, Marco Salerno and Maria Paola Satolli and the Rotman Finance Lab Team. 

The competition was run using the Rotman Interactive Trader simulation software, developed by Jasper Chan, Kevin Mak, and Professor Tom McCurdy of the Rotman School.

The competition’s lead sponsor was Enel, and the case sponsors were Bloomberg and CC&G (London Stock Exchange Group).  Side partnerships and media support were provided by European Investment Bank Institute and Plus24. RETC received the support of the Embassy of Canada and the City of Rome.