The Futures Market—and Students’ Futures

Undergrad experience with commodity trading translates into jobs

Using real-world commodity-trading software and armed with simulated trading experience in agricultural markets, a number of CALS students 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, a 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—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 CALS 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 go on to compete in the CME Group Trading Challenge, a simulated trading competition that pits hundreds of college teams from around the world against one another as they make real-time commodity trading decisions. Du’s students participated in the event in 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, offering 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 BS’15, 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.

“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.

Brad Jaeger BS’16, a fresh grad who landed a 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.

“We learned fundamental analysis, and although we never advanced in the trading competition, we received a lot of great live trading experience,” says Jaeger, who led a team this year.

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, says Du.

“I am always looking for ways to increase the trading component, which is important for students’ understanding of the markets,” Du says. “It’s also important for their professional futures.”

PHOTO – Students in the 2016 CME Group Trading Challenge included (left to right) Jackson Remer, Brad Jaeger, Carly Edge, Cory Epprecht and Sam Seid, with agricultural and applied economics professor Sheldon Du (far right).

Photo credit – Sheldon Du