Students in the Muma College of Business began trading for bragging rights and a $1,000 scholarship when a virtually simulated stock market opened Sept. 8 as part of the Muma Trading Challenge hosted by TD Ameritrade.
The Muma Trading Challenge has been brought to the USF for the first time in hopes of inspiring interest in the finance department, said Dan Bradley, chair of the Muma College of Business finance department.
By giving students a chance to learn more about stock trading, Bradley hopes to see more finance students in the future. This virtual market allows students to trade as much or as little as they want to from a selection of 545 securities, as long as they execute at least 25 trades by the end of the semester.
“This competition inspires interest in the finance department with no cost to the students,” Bradley said. “Students are able to learn the most by executing trades with real clients. This platform provides students with a hands-on experience.”
Using the TD Ameritrade platform and $1 million in virtual cash, competitors are able to execute trades via their laptop or mobile device. The student with the largest account value by Dec. 3 will win the prestige of victory over their classmates, as well as the $1,000 scholarship.
Before the challenge began, there was an expected turnout of about 200 participants. USF has exceeded that number, as there are now 440 students registered, 30 percent of whom are finance majors. Bradley said he expects the finance majors to trade more frequently, although all business students have an equal shot at the top spot.
In order to bring this competition to USF, the finance department had to find a platform large enough to encompass all of the university’s business students. Bradley said he had planned to use a different platform when TD Ameritrade emailed him about the competition. Ultimately, Bradley decided to go with TD Ameritrade because of their large platform and dedicated staff.
Bradley said he was surprised that a competition like this had not been brought to USF before now.
USF is the biggest platform TD Ameritrade has provided on a university level for this competition. He said word will spread about this year’s competition and USF will be able to continue increasing the number of participants in the future.
“As soon as I got the email, I knew I wanted to join,” said Jake Smith, finance major and current challenge leader.
Now in his last semester of his master’s program, Smith has cultivated financial experience that will give him an advantage in this competition. He has held finance positions at FedEx and Feld Entertainment, a live show production company, and has invested his own money in the stock market.
While Smith developed a set of strategies he uses while trading in real life, he said he employs a completely different strategy when trading in the simulated market.
Rather than playing it safe and investing in stable companies, Smith said he prefers to invest in more volatile stocks that have a higher probability of rising significantly. Smith said in order to stay in lead, he has to take risks and make bigger trades.
The competitor simplified his strategy for fellow traders by quoting Will Ferrell in “Talladega Nights: The Ballad of Ricky Bobby:” If you ain’t first, you’re last.
Smith said the simulated market allows him to test out different strategies because he is not worried about losing his own money. Although the strategies are different, the knowledge Smith is able to gain throughout the challenge will make it easier for him to be successful in the real market.
Smith attributed his lead mostly to luck, but it seems to be more than that as he’s been able to maintain his position for nearly two weeks.
Bradley said this competition is something USF plans to continue. During the spring semester, the finance department plans on relaxing restrictions on trading in order to make it more realistic. In the future, students will be able to trade on margin and invest more on individual trades.