Over the last 13 years, the CME Group Trading Challenge has hosted students from hundreds of colleges and more than 40 countries.
Like any lasting program, the Trading Challenge has also built a long list of alumni. What started as a few dozen teams in its first few years has grown to 400-500 each January when the competition starts again. That means thousands of students entering their careers with the Trading Challenge among their list of credentials. We caught up with a few recent top finishers to see where they are now, how the competition influenced their careers and to get their words of advice on trading. This is an edited version of our conversations.
Daniel Sanabria, University of Alabama-Birmingham, 2nd place 2015
Among former Trading Challenge competitors, Sanabria may be one of its biggest advocates. Before finishing his MBA in December 2015, he had already started his own alternative asset management firm that uses a strategy based on his team’s approach in the Trading Challenge. He currently has $1 million in assets under management with eight clients, but hopes to grow that figure to $5 million by the end of 2016, and eventually to $100 million. The portfolio includes CME Group products in precious metals, agricultural and energy markets.
Why did you succeed in the challenge? I think that part of the success of our team relied on the fact that we understood the dynamics of the competition early on. We placed a lot of focus on a systematic strategy that would be easy to execute. That played out well for us. In the end, if you have to do every single trade by investment committee, you’ll never get to the right answer for that.
Where has your career taken you? While we were trading in the competition, I did an unleveraged version of the strategy trading it live using some seed capital I had obtained. I used it as a source of inspiration to go on my own and decided to implement this as an alternative asset management company, which I incorporated in June 2015.
I use the challenge in every single sales pitch to a client. Everybody loves to hear that we had such an accomplishment, especially in a competition sponsored by the largest derivatives exchange in the world.
What is the value of learning to trade? Trading forces discipline and attention to risk management. Before you enter a position, you have to have an exit plan. That is applicable to any industry – understanding what your contingency plan is going to be before you make a decision. That is nearly as valuable as the decision itself.
Bruno Arthur, University of Kentucky, 6th place 2013
Arthur competed in the competition twice as a graduate student, and became one of the Trading Challenge’s most enthusiastic evangelists. Since becoming a lecturer in economics and finance at the University of Texas Rio Grande Valley (UTRGV) he has advised 11 teams who have participated the last three years. In 2014, three of his teams made it to the final round.
Why have you and your students succeeded in the challenge? When I got to UTRGV I was teaching portfolio management – about how to diversify, trade like this or that. We were persistent and we got three teams who made it to the championship round. I have taught that class ever since. It used to be that I taught the trading class at the same time the competition was happening. But you cannot be learning to trade as you go. I moved the class to the fall, and students were better prepared for the Trading Challenge.
I already have a few students ready to compete next year. And there are two from last year’s teams who are currently day traders.
What is the value of learning to trade? It’s not only about financial markets and looking at price or understanding supply and demand. I speak a lot about working in a group. Even if we don’t win, I think students benefit a lot. They learn discipline, they learn to read a lot, to get organized, and work well together in a team. They will have to do that anywhere they work, so it helps that these teams force students to work in a group.
Rodrigo Brugue, Polytechnic University of Catalonia (Spain), 1st place 2014
Brugue was part of the first non-U.S. team to win the Trading Challenge in 2014. He has since graduated and moved beyond the financial world to focus on literature and technology, focusing on 3D printing and virtual reality. You can read our 2014 interview with him here.
What is the value of learning to trade? It’s good to learn about fundamentals and technical analysis. It’s a useful lens/prism to have when looking at geopolitics, stocks, companies, different world economies and new trends happening. What influences the markets, what doesn’t, or even how the markets drive real world events.
Also seeing all those math concepts and quantitative methods you learn through school applied in economics is rather amusing. And it helps to understand what a zero sum game is, what a negative sum game is and what isn’t.
Sathya Ganesan, University of Chicago, 1st place 2012
Ganesan’s team of MBA students at the Chicago Booth School of Business were the last graduate team to win the competition. In an interview in 2013, he told us “If you see the way the competition is structured, people are competing really hard. There’s an excitement of just the format, that it’s done electronically and you’re competing against your peers.” He now leads technology product strategy and has worked for Intel and Motorola Mobility.
What is the value of learning to trade? Trading, especially in the short term, involves a lot of noise. To be successful, one has to filter out the noise to clearly identify the underlying signal. Our success in the trading challenge came from having a disciplined and methodical approach, and focusing on the big picture. This enabled us to focus on the underlying signal and filter out the noise. This framework has worked well for me in other aspects of my life and career.