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Online Trading Game

Dr. Martha O'Hagan Luff, an Assistant Professor in Finance in Trinity Business School.

Here she talks about her experience of creating an online trading game as part of the BU7803 Investment Theory for the MSc in Law and Finance class.

Dr Martha O'Hagan Luff photo

What might an ‘assignment brief’ look like for this assessment type in your context?  

The assignment brief would be as follows: A class trading game will be run on StockTrak for 8 weeks during Hilary Term beginning on Monday of Week 3.  You have €1,000,000 to invest over the period.  You can trade equities, bonds, commodities, currencies and ETFs on exchanges across the world.  You can buy on margin, short sales are permitted and you can invest a maximum of 25% of your starting amount in one asset.  At all times you should hold a maximum of 20% of your portfolio in cash.  At the end of the trading period you should submit a report describing your trading strategy, including the following points:

  • Describe the main drivers of your total return (the total increase in the portfolio value) in EUR.  Comment on your currency exposure over the period.
  • Describe the main drivers of your risk-adjusted return, measured using the Sharpe Ratio.
  • Describe your trading strategy, and comment on what you did and did not expect to happen.
  • What would you do differently if starting again, and what would you repeat?

What are the main advantages of this assessment type?  

Students really enjoy it, it is easy to set up.  It is also a very good learning exercise as they see in practice how volatile equity prices can be in comparison to other assets such as bonds.  They can also see the effects of leverage in practice.

What are the main challenges for using this assessment type?  

There were some technical issues but the online support on the StockTrak platform has been very good.  Also the trading game teaches students about short term speculative trading but not about long term investment, which is why I also have an assignment looking at the long term investment allocations of sovereign wealth funds.

Why do you use this particular assessment type in a digital context? 

This was a good medium to get students engaged in the module, bringing out their competitive side (the platform publishes a leaderboard of all participants in the game!).  It also got them watching financial markets and thinking more deeply about the factors driving the valuation of different financial assets.

What advice would you give a colleague thinking about using this type of assessment?  

I would not give any marks for performance in the trading game but rather for the students’ description of their trading strategy, what they would have done otherwise and what they learned about financial markets from participating in the game.   

Do you recommend any resources or technologies to support this type of digital assessment?  

I have used MarketWatch in the past but used StockTrak for this first term this year and found it to be excellent with very good technical support which has been needed from time to time.

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