Using real-world commodity-trading software and armed with simulated trading experience in agricultural markets, some University of Wisconsin-Madison students in the College of Agricultural and Life Sciences are finding paths to jobs after graduation.
“We prepare students by providing the knowledge of the trading software used by professionals and an understanding of how these sometimes-volatile markets work in real time,” says Sheldon Du, assistant professor of agricultural and applied economics.
Du says that the market for Agricultural Business Management majors is promising, and students’ experience with professional software platforms and hands-on simulated commodity trading makes them more attractive job candidates.
Du has taught his spring undergraduate class, Commodity Markets, since 2012. His students learn about economic concepts related to commodity futures and options contracts, pricing mechanisms, and principles and techniques for using derivatives to hedge price risk. They also learn about commodity trading, wherein futures contracts of commodities—such as grains, dairy products and energy—are bought and sold through organized exchanges to generate returns or to manage price risks.
Last year, Du—with the enthusiastic backing of his department—applied for and received a grant from UW-Madison’s Educational Innovation initiative to expand the class experience to include an optional 10 weeks of training during the following fall on technical analysis using X_TRADER® software, a professional trading platform that was donated to the College of Agricultural and Life Sciences in 2014 by Trading Technologies International, Inc. The school has since migrated to Trading Technologies’ new TT® platform., which became commercially available in 2015.
Students can also choose to go on to compete in the CME Group Trading Challenge, a simulated trading competition, which pits hundreds of college teams from around the world against one another in as they make real-time commodity trading decisions. Du’s students first participated in the event in late winter 2015 and then again this year.
Competing in the challenge requires students to use electronic trading software to execute trades on the CME Globex trading platform, providing students added experience with real-world tools and techniques. This spring, seven UW-Madison students on two teams took part in the competition.
Andrew Berger, who was on one of two trading teams last year, went on to become a risk analyst for Henning and Carey Technologies in Chicago after graduating in May 2015.
“The fundamental knowledge that I gained about futures and options contracts, hedging techniques and financial market analysis prepared me well for the interview,” says Berger, who returned to campus this spring to speak to Du’s students.
Jackson Remer, a UW-Madison senior who just finished his second competition as leader of one of two teams, says the experience has been invaluable.
“Its has exposed me to the meat and potatoes of the Chicago Mercantile Exchange. I have gained an understanding of the markets it trades, what affects them fundamentally and about the technical indicators traders utilize,” says Remer. “I have been able to use this group as a talking point in every job interview.”
Brad Jaeger, a senior who just landed a post-graduation job as a grain merchandiser at Wisconsin’s Country Visions Cooperative, says his two years of competing in the challenge, plus the academic grounding he received, were instrumental in launching his career.
Last summer, Jaeger worked at as a grain merchandising intern at CHS Inc. in Minnesota, which “snowballed into the experience I needed to get a full-time job.”
“We learned fundamental analysis, and although we never advanced in the trading competition, we received a lot of great live trading experience,” adds Jaeger, who led the other UW-Madison team this year.
Facing competition from 468 other teams, including prominent business school teams from around the world, UW-Madison’s teams finished 86th and 252nd in this year’s preliminary round of the competition. Only the top 50 teams advanced to the championship round.
Du says that exposing students to the theory of commodity markets, along with practical trading situations and tools helps them get a taste for the profession and the experience to impress prospective employers.
“I am always looking for ways to increase the trading component, which is important for students’ understanding of the markets,” says Du. “It’s also important for their professional futures.”