WIU CBT Finance & Commodities Trading Lab

Legacy Partnerships Transforming Dreams into Reality at the College of Business and Technology

Craig Conrad, DBA

Dean, College of Business & Technology

Finance & Commodity Trading Lab WIU College of Business and Technology

Summary Western Illinois University College of Business and Technology seeks to remodel a highly visible classroom space into a financial trading laboratory designed to give students real-time experience with both traditional investment instruments and advance training in commodity markets, merchandising, futures, and options.

The lab will improve students’ financial literacy, bring a real-world reality to concepts taught in the classroom, and will provide a training platform and teaching facility for trading, dynamic simulations, and technical analysis tools needed by the investment professional.

Training provided in the lab will enable students to understand financial and commodity trading concepts and create solutions for real world situations, especially in use of industry investment and trading platforms. The lab will help WIU build on the successes obtained by our students with previously limited resources and meet the needs of the future workforce.

PROJECT BREAKDOWN: Space renovation, including electrical upgrades and telecommunication infrastructure Multi-monitor student workstation computers Collaborative workspace configuration with dynamic live ticker Financial Informatics: Live and Historical Data Feeds (i.e. Bloomberg, CQG, Thomson Reuters, Firstcall, Datastream, Morningstar, and others) Large format presentation monitors, faculty workstation/control panel, and full remote classroom capability

Recent Accomplishments Over the past five years, the WIU Commodity Trading Team has successfully competed in the Chicago Mercantile Exchange (CME) Group Trading Challenge. In 2018, the team finished 18th out of a 600 two round team competition, beating teams from much larger institutions, including Arizona State, Wake Forest, Cornell, Yale, University of Missouri, and University of Illinois. In 2019, the competition was completed in one round, with WIU finishing in the top 11% of 409 teams. In 2020, the success continued as the team finished in the top 8% of 503 teams, once again rating higher than their counterparts at University of Illinois, Northeastern University, and Rutgers. The team has been led each year by Dr. Jason Franken, who holds a PhD in Agricultural and Consumer Economics and a Master and Bachelor of Science in Agricultural Economics.

Project Timeline Stage 1

Finance/Commodities Trading Lab Base Funding: basic equipment including space configuration/build out, workstation furniture, base computer hardware, software support for commodities, and limited other financial software.

Stage 2

Enhancement of Lab Capabilities: acquisition of multi-year terminal funding and supportive software is now based on an annual subscription fee. Multi-year funding is crucial to maintaining the lab.

Expected Goals and Outcomes The lab will create hands-on education experiences where students can assume the role of “live information consumer” to commodity brokers, producers, buyers, processors, traders, and speculators.

It will expand student career and learning opportunities and decision making skills by providing stateof-the-art trading platforms and simulations in multiple fields.

Specific courses projected to utilize the Trading Lab include, but are not limited to: • Ag 220 - Introduction to Agribusiness Concepts • Ag Econ 333 - Agricultural Marketing • Ag 349 - Agribusiness Management • Ag Econ 443 - Agricultural Finance • Ag Econ 447G - Commodities Markets and Future Trading • Ag Econ 455G - Advanced Agricultural Marketing • Ag Econ 457G - Market Profile • Fin 496G - Futures and Options Markets

• Fin 575 - Advanced Portfolio Management • Econ 465G - Energy Economics • SCM 330 - Warehouse Management • SCM 340 - Transportation Management • SCM 411 - Global Supply Chain Management • SCM 465G - Risk Management • SCM 470G - Inventory Management • SCM 539 - Transportation and Warehouse Management

Projected Impact Agriculture Once completed, the lab will have an immediate impact on the education of over 225 agriculture students. Increased exposure to commodities trading early in their academic careers will have an impact on the number of students that further pursue the Agriculture Economics degree and advanced training in the Markets and Futures Trading courses.

The School of Agriculture also benefits in that multiple courses impacted by the creation of the proposed space serve Integrated MBA students and thus supports the transition of undergraduate students to a highly relevant MBA with Agriculture concentration. This, in turn, will yield a higher number of graduates prepared at the highest levels for employment in the commodities trading and marketing arenas. The advanced capabilities of the trading lab will push the success of our Commodity Trading Team on the national level, which will provide direct benefits in recruitment of students interested in the field of study.

Accounting, Finance, Economics, and Decision Sciences Financial trading and market analysis provide an ideal backdrop for real world applications of economic and financial theory. The nearly 100 students majoring in Finance, Economics, and Business Analytics will benefit from the opportunity to employ their theoretical knowledge of arbitrage, capital asset pricing models, Black-Scholes-Merton option pricing models, supply/demand analysis, and statistical forecasting techniques to markets. Within our existing curriculum, the trading lab will play an integral role in the assignments and projects in our Finance 496G (Futures & Options Markets) and Finance 575 (Advanced Portfolio Management) courses. While these finance courses will have the largest direct impact, there are numerous other, tangential, but important, benefits to students. Within the School of Accounting, Finance, Economics, and Decision Sciences, we have several student groups (Finance Club, Investment Club, Analytics & Economics Student Association) that assist students with their professional skills development. The trading lab will provide a fruitful opportunity for students and faculty to collaborate and increase engagement outside the classroom.

Supply Chain Management Discussion with industry partners identified Risk Management as an important component in the professional preparation of the Supply Chain Management students. Towards this end, SCM 465G (Risk Management), was added as an undergraduate elective course and is available for graduate credit in both the SCM Post Baccalaureate Certificate and the MBA Supply Chain Management concentration. The planned hardware technology deployment in the Trading Lab space will support the addition of application-based software to support and enhance the use of industry standard information services in identifying and tracking potential supply chain disruptions. Additionally, the lab space could support the deployment of multiple industry specific analytical/operational simulations in the areas of warehouse management, traffic management, and ERP.