Students at Fresno Pacific University have taken on the world and scored in the top 10.
A team led by senior John Koretoff (BA ‘15, business administration—finance) and advised by Jim Bryan, Ed.D., associate professor of business administration, placed ninth in the 12th annual CME Group Trading Challenge.
FPU didn’t just place in the top 10, they did so alongside such schools as the University of Alabama (Birmingham), Boston University and Carnegie Mellon as well as universities from China, Japan, Germany and Zimbabwe. The challenge is a four-week competition where undergraduate and graduate teams trade CME Group futures. “This is the only competition available for students to trade on a real-time professional trading platform [and] gather a first-hand understanding of how to trade futures and manage risk,” according to Genevieve Nyren of the Edelmen public relations firm, representing CME Group.
A worldwide derivatives marketplace, CME Group (cmegroup.com) exchanges offer a wide range of products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CQG, Inc. (cqg.com) provides trade routing, global market data and advanced technical analysis. CQG partners with more than 100 futures exchanges around the world.
“This was real-world experience,” says Bryan. “[Participants were doing] live trading on the exchange. The only thing that wasn’t real was the money being used. The commissions being ‘paid,’ and the volatility of the markets were real.”
The students—representing more than 500 teams from 226 colleges and universities in 37 countries—traded on a professional trading platform provided by CQG and learned about market events by accessing professional resources like live Dow Jones newsfeeds and The Hightower Report.
A catcher/infielder for the Sunbird baseball team, Koretoff developed an interest in the financial industry in high school but didn’t seriously consider a career in the commodities future market until recently. A Clovis West High School classmate, Michael Brown, placed fourth in the 2012 competition as part of a team from Menlo College. His encouragement and mentorship played a role in Koretoff’s decision to take on the 2015 Challenge, Koretoff says.
Bryan agreed to be faculty advisor, and two classmates and fellow baseball players, Wilson Ashford and Michael Tittle, rounded out the team to provide the requisite number of participants. Then it was time to get down to business--literally. Koretoff sent in the application and spent his Christmas break studying and strategizing.
“We were approved for the competition by early December and at that point I ordered my study book for the National Futures Association Series 3 Exam,” Koretoff says. Though it was not a required text, Koretoff thought the exam would provide him with industry knowledge that would prove useful in the competition. “I would need to take it before starting a career in the field following graduation,” he added. Passing the exam in early January, he then familiarized himself with the software used in the challenge.
In the initial round of competition, teams were given a virtual $100,000 with which to trade on the commodities exchange. Koretoff chose to focus on crude oil futures, hoping its volatility would allow him to do well. He had to stay on top of the markets and continually research the subject to make decisions about his trades.
“As the competition went on and I became more comfortable with this particular asset class, I looked to combine fundamental reports from the American Petroleum Institute, Energy Information Administration and Baker Hughes into my decision-making,” Koretoff says. “Additionally, I stayed alert for news coming out of influential OPEC members Libya, Iran, Ukraine and Greece. Each of those sources possessed potential to cause price movement.”
After the first round, Koretoff found his team in ninth place overall. As one of the top 50 teams, he was invited to continue to the second round, in which each team started fresh in the standings, this time with $250,000. Even with some setbacks, he was able to again finish in the top 10.
Coming from behind
“My make or break moment came two days before the conclusion of the championship round when I made a bad call on a position I had been building for over a week,” Koretoff says. “I had to make a strategy adjustment in order to still place in the top 10. I recovered, made the adjustment and entered the trade that recovered all the losses plus a little extra to give us a ninth-place finish. It was stressful, but a great lesson.”
Koretoff and Bryan traveled to Chicago for the awards ceremony April 8-10, 2015. While there, Koretoff toured the Chicago Mercantile Exchange, went out on the trading floor and networked with professionals in the field.
Bryan anticipates that those students who placed highly in the competition will have an edge when looking for employment because “firms are looking for people who can actually trade money.”
That the team took ninth place out of more than 500 participants speaks to the richness and depth of FPU’s business program. “I am extremely thankful for the education I received here,” Koretoff says. “I loved being part of our academic and athletic communities. The students and faculty at this university are top-notch. The professors in the School of Business are exceptional. They do a spectacular job at expanding our views of the world and increasing our understanding.”
With this success in his field before graduation, Koretoff has an eye toward the future. “My goal is to work for a financial firm in Chicago or Manhattan and specialize in energy sector analysis before pursing a master's degree in financial engineering,” he says. “Eventually, I want to run a hedge fund.”
A tall goal, but a possible one, Bryan says. “A big part of the CME Group Challenge involved using expertise from classes taken. A broad range of courses offered at FPU [prepares students] to go down a career path of a Wall Street or commodities job,” he added.
By Katie Fries