Baruch MFE students take third in trading competition

This year, the eighth annual Rotman International Trading Competition took place from Thursday, Feb. 17 to Saturday, Feb. 19 At the end of this three-day conference, Amanda Kotler, Yike Lu, David Rappaport, and Alexei Smirnov, all of whom are Masters in Financial Engineering students at Baruch, along with Professor Dan Stefanica, returned victorious. They placed third out of fifty teams from forty-six different universities around the world.

The RITC is held annually in Toronto, Canada by the Rotman School of Management at the University of Toronto. The competition simulates real world markets and market conditions that participants of the competition trade in. The goal is to earn the greatest profit during the three-day conference. The competition consisted of seven scenarios: Social Outcry, Interest Rates, Sales and Trader, Quantitative Outcry, Commodities, Quantitative Event Driven, and Algorithmic High Frequency Trading. The Baruch team came in third place overall, but placed first in the HFT case with a score of 9.00.

Months before the competition, the team practiced in a number of ways. Kotler said, "We practiced a lot. Every night after class." They created their own cases, manipulated market conditions, worked with the Subotnick Financial Services Center to create their own trades, and also ran their own spreadsheets on the RITC practice servers. They constantly worked together to test their trading scenarios.

The team was guided by Dan Stefanica, a member of the Baruch MFE program faculty. Kotler says, "Dan was truly a mentor in the experience. I would say he was much like the coach in The Mighty Ducks. He kept us isolated from the other teams; he kept us focused and helped us not to get drawn into the social element of it more than we had to. And that really contributed a lot to our performance."

In addition to the supportive mentoring that Stefanica provided, the team members chose to implement a strategy in which the two strongest team members would participate first and the other two members would follow afterwards. They used the five-minute break in between to meet and communicate what had already been done, which set a benchmark for the team, as well as discuss the conditions that the other team members could expect for their portion of the case. The strategy brought them immense success, but if they participate again next year, the team agrees that they would do several things differently. Lu said, "If we go back, we've already learned. We can just be aggressive from the outset."

The team attributed much of its success to the Baruch MFE program, one of the top programs of its kind in the country. The combination of studies of mathematics, finance, and computer science allowed the team members to excel at the competition.

In addition to the interest that the students have in trading, they were also motivated by the desire to compete, learn, and gain prestige. Rappaport mentioned that "[the competition] really solidifies the intuition behind everything." Smirnov said, "I've always been active in competitions…for me, I just wanted the other people's blood." And Lu said that "[the other schools] may have started out with a lot of money, but we ended up taking it. That's what it comes down to in trading."

For students who are interested in participating in future RITCs or in applying to the Baruch MFE program, the successful team offered some sound advice: learn your math, search for RITC 2011 on Google.com for information about the competition and case materials, and contact the Mathematics Department for information about the Pre-MFE program.

And when asked how they felt about placing ahead of many prestigious schools, some of which were Duke University and University of Pennsylvania's Wharton Business School, Smirnov replied, "Imagine the lobby of our college and there are 200 people just staring at the screen. There's a graph with people they've never heard of [Baruch College] and they're completely destroying MIT."