Rob Wherry, MBA student, and Michelle Golojuch, finance and accountancy major, track a stock on a Bloomberg Terminal in DePaul's Finance Lab. The virtual trading room contains the latest in high-tech trading, investing and finance software.
The statement from the Federal Open Market Committee (FOMC)
meeting in January had barely been made public before DePaul University finance
student Arman Hodzic saw the reaction in the markets. Hodzic watched in real
time as the Standard & Poor’s 500 Index and the yield on the 10-year
Treasury reacted to the news.
Traders and investors were responding to the Federal
Reserve’s statements on monetary policy. Prior to the announcement, Hodzic and
his partners, fellow undergraduate students Alex Netzel, Dhruvish Shah and
Brendan Newell, used Trading Technologies Algo Design Lab (ADL®) to create an
algorithm that would take long positions on the market and hopefully earn them virtual
Hodzic and his team used specially engineered keyboard terminals
created by Bloomberg L.P. to access real-time market data to see the
pendulum-swinging Treasury yields and the S&P in vivid charts, graphs and
They waited patiently, watching the “iceberg” algorithm they
created execute automatic trading actions. At the end of their trading they had
a simulated $33,000 profit.
“The market was acting really wildly and we profited off
that,” says Hodzic. He was one of about 40 students enrolled in a “Money and
Banking” course who participated in the simulated trading event at DePaul on
Jan. 28. They experienced firsthand how announcements by the FOMC, a Federal
Reserve committee charged with setting monetary policy, can precipitate a
flurry of investment and trading activity.
Technology Offers Real-World Experience
Though the trading event was a simulation, its benefits were
real to students. The Trading
Technologies software and algorithmic trading tools Hodzic and his
classmates used are the same ones used by professionals who work in the finance
Terminals Hodzic used to monitor the U.S. markets are similar to the
Bloomberg terminals used by hundreds of investment firms nationwide. And all
of this technology can be found in the Driehaus College of Business’s Finance
Lab, a virtual trading room on the 5th floor of the DePaul Center on
the university’s Loop Campus. Hodzic says the trading simulation imbued his
textbook lessons with life.
“It was like being in a real trading room,” Hodzic says.
“It’s experiential learning. It’s way different than sitting in a class, taking
notes, and reading from a Power Point. You’re actually in front of a computer
that shows you what’s going on in the market. You can benefit greatly from the
teacher and the technology in this room.”
Assistant Professor of Finance Lamont Black confers with a student in one of his classes in DePaul's virtual trading room.
The trading simulation was coordinated by Lamont Black, DePaul
assistant professor of finance, and Leo Murphy, university program manager at
the Chicago-based software vendor Trading Technologies. It was just one of the
many ways DePaul’s the virtual trading room is bringing the real world of
finance to students’ desktops.
More than computer monitors, televisions and cool
architecture, the virtual trading room offers DePaul students a gateway to better
learning and more prosperous future.
“Students need to be familiar with the technology for their
careers,” says Carl Luft, associate professor of finance and academic director
of the Arditti
Center for Risk Management. “That room provides the tools for students to
put them in the best possible position to succeed.”
Investing in the
The idea for a virtual trading room at DePaul actually began
decades ago, says Luft. That’s when the former chair of the finance department,
Geoffrey Hirt, envisioned a classroom that would include the day’s latest
The first iteration was half the size of the current Finance
Lab. The lab now includes 30 dual-monitor terminals, each with Trading
Technologies X_TRADER® trading software installed, plus 12 Bloomberg Terminals
and multiple subscriptions to a host of finance and investment management
software and services including Morningstar, Reuters and Wharton among others.
Eight of the Bloomberg Terminals were recently added thanks
to a generous gift from the Keeley Family Foundation founded by John L. Keeley
Jr., president and chief investment officer of the Chicago-based Keeley Asset
Management Corp., and his wife, Barbara.
Rob Wherry, an MBA student seeking to make a career change
from journalism to finance, uses the Bloomberg terminals in an investment
seminar course taught by Associate Professor Finance Vahap Uysal. The graduate and undergraduate students in the class mine
data on the Bloomberg terminals to manage a $500,000 portfolio of stocks.
“The depth of information you can get off the terminals is
unparalleled for students,” says Wherry. “For example, I was just recently
doing a lot of work on the energy industry, specifically about oil prices, and
I could go to the terminal and quickly find historical prices, current prices,
future prices, rig counts, production levels by country, acquisitions. If I didn’t have the terminal, I would likely
have to go find sources for each and all of those data points, which probably
would have added a day or two onto my research time."
Multiple Uses for
Currently, there are 13 classes using the Finance Lab as a
base for learning. While many use it for simulated events, such as the one that
occurred in Black’s class, other classes meet in the lab to do real investment
More than 1,200 students used the technology in the spring
quarter of 2014 alone. Students —both undergraduate and graduate—in a variety of disciplines, from finance to
mathematics and economics, have the
opportunity to learn the software and use the lab’s sophisticated tools.
In the course “Applied International Portfolio Management,”
graduate and undergraduate students learn the ins and outs of international
markets while managing a $100,000 music student scholarship endowment. Finance
students use the Bloomberg terminals to do everything from valuation of
companies, to comparative analysis of stocks vs. industry performance.
Though students don’t make any trades—that’s done by a
licensed professional—they make the decisions that affect the portfolio’s
growth or decline. The portfolio includes industries and companies solely in Europe,
Africa/Middle East, Asia/Australia or Latin America.
Students enrolled in another course, “Fundamental
and Technical Currency Trading,” participate
in managing the “M Demon Fund.” Set up by adjunct finance professor Leslie
McNew, a 25-year veteran of the markets, with her own money, the fund is
managed by students. It provides
students with an opportunity to learn how to manage a portfolio and trade
stocks in foreign exchange markets.
“In most other classes, you are talking in generalities
about investing,” says Wherry, "But [at DePaul] you are talking about coming
up with an idea, finding a stock, researching the sector, defending it in front
of your peers and your professor, and then actually putting money behind your
idea. I think if you have that on your resume, it sticks out to a possible
The Finance Lab benefits faculty as well as students. “Having
technology makes me a better teacher,” says Luft, who teaches risk management
and derivative valuations, among other courses. “Having a room like that where
we can use it as a lab and as a classroom makes the subject matter come alive.
It’s not esoteric and detached.”
Lab + Chicago = Unique Opportunities
Arman Hodzic, Dhruvish Shah and Alex Netzel, discuss changes to the trading algorithm they created using the Trading Technolgies software in DePaul's virtual trading room.
While other finance students across the country have access
to Trading Technology’s software, few have access to the kind of networking
opportunities that DePaul can offer because of the business school’s strong
connection with, and location in, Chicago’s financial district.
Take Hodzic’s group, for example. The students focused on
algorithmic trading, the practice of using advanced mathematical models to make
transactions in the financial markets.
While Chicago-based Trading Technologies provides its X_TRADER
software to dozens of universities around the nation, its proximity allowed
DePaul students to gain an insider’s view of the ADL®, its visual programming platform for algorithmic traders.
And when Hodzic and his classmates wanted to delve deeper
into ADL, the finance software vendor extended an invitation to visit its
headquarters in downtown Chicago.
“We went to Trading Technologies and it was like going to
NASA,” says Newell. “It was the coolest thing. There were monitors everywhere
and they gave us a tour, showed us how they built their algorithmic design tool,
how it worked and how we can build better algorithms with it.”
Black says the Finance Lab helps to expand his classroom
beyond his own expertise.
“DePaul’s location gives us a comparative advantage,” says
Black. “We are an urban campus in one of the financial centers for the country.
Having this technology allows me to bring professionals into the classroom who
use the technology in their every day jobs. They don’t just talk about what
they do, they show students what they do using the technology in the room.”
Though the Finance Lab is already a crown jewel in DePaul’s
finance department, its potential to help students
learn has hardly been exhausted.
“My vision for the Finance Lab is that it becomes a forum where
students and employers can connect,” says Black. “Ultimately, what I would love
to do is have local financial services employers in the classroom teaching students
what they do, and my role is to connect the dots.”
Learn more about programs and courses offered through DePaul's Department of Finance.