DENVER - Young would-be traders at the CU Denver School of Business are getting a first-hand look at the world of commodity markets through a challenge that lets them get hands-on experience trading volatile commodities like gold and oil.
The challenge takes place on a trading platform provided by CQG, a provider of electronic trading platforms and technical analysis to professional traders.
Teams start with a simulated account balance of $100,000 to trade over the preliminary round, measuring their returns against those achieved by other teams. Teams finishing in the top 10 percent move on to trade for two weeks in March in the Championship round with a simulated account balance of $250,000.
Until this year, the competition has allowed trading in two commodities - gold and crude oil. In the 2013 competition, cornis beingadded to the mix - something that will likely make the competition even more challenging. Corn markets continue to feel the effects of the worst U.S. drought in more than 70 years.
Another returning sponsor this year is Dow Jones Newswires, which provides real time market moving information for the energy and commodity markets which competitors can view within the CQG platform.
CQG became involved with the competition 10 years ago after Stan Yabroff, a product specialist there who had spent 15 years on the floor of the New York Mercantile Exchange (NYMEX), learned of it and recommended that the firm provide support.
"I saw this as an opportunity to give college students a trading experience, and I thought it was invaluable," Yabroff says. "Any time you can give college students an experience they can't get anywhere else, that's a home run."
The fact that the competition is strictly for college and university teams and has a championship session that extends for two weeks in March perhaps makes the Commodity Trading Challenge the equivalent of March Madness for business and economics students.
Though the top two teams in last year's competition were from Chicago, their geographic proximity is only a coincidence. More than 630 students from 90 universities across the globe participated in the 2012 competition, including schools from Germany, Greece, England, India, Canada, Malaysia, and Poland.
Members of the winning team receive a cash prize. Several participants over the years have gone on to work in the derivatives and energy industries for firms including BP, Valero and MBF Clearing.