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Financial Simulation

The following workshops are designed to apply financial pricing techniques to real-world scenarios. Each simulation embeds simple economic trade-offs into practical exercises. Students are assigned in groups learn how to incorporate simulated market information into trading strategies and execute them on the simulation platform below in a competitive environment.

Bid-Ask

The simulation provides an opportunity for students in finance, economics and related disciplines to develop a comprehensive insight over risk assessment and management on a market microstructure trading platform. Participants serve as market traders who are required to combine operations of financial markets with academic theories to maximize their investment value in an interactive and dynamic environment. More specifically, participants are tasked to discover a tradable asset’s price based on their learnings from observed bid-ask prices posted by other market participants, compute their optimal bid-ask spread, and execute trades over multiple rounds. Participants face a trade-off between exploiting gains associated with posting profitable quotes based on their privately developed strategies versus minimizing losses associated with revealing their private information through their posted quoted prices.

Schedule

  • Monday 17 October 2022
  • 9am (UK time)

Timeline

  • Briefing: 9:00-9:15am
  • Practice Round: 9:15-9:30am
  • Simulation Exercise: 9:30-11:30am
  • Debriefing 11:45am

Portal

On the simulation day, use the Digital Ocean platform described below. Follow the instruction to access the trading platform via: http://159.89.95.249/login/

Study Material

Handouts are distributed on the day. Participants are encouraged to review the Reading List in preparation for the trading simulation.