Interactive Brokers (IB) held its second annual IB Olympiad Trading Program to attract qualified college graduates to the trading profession. This year's contest, which began Jan. 15 and ended March 9, attracted 260 participants, up from 125 in 2006, according to the global broker and market-maker, which publicized the contest through college admissions offices as well as with e-mails to candidates and signage displayed at college placement offices.
IB runs the contest as a way to recruit technology-savvy computer science and engineering students into its business. Each contestant starts with $100,000 in phantom money and develops a workstation application program interface. Students must create a computerized trading program that generates at least 25 trades. They can trade stocks, bonds, options, futures and foreign exchange -- all the products in IB's universe, according to Steve Sanders, managing director at Interactive Brokers.
The top student trader will receive $100,000 in prize money. In addition, there are two second-place prizes of $50,000 each, 10 third-place prizes of $10,000 each and 100 placing prizes of $1,000 each. To qualify for a prize, contestants must generate a profit.
Because the skill set necessary to compete on the trading floor has changed, IB's market-making business has been replacing floor traders and specialists with programmers and technologists, explains Sanders. "It used to be street smarts and aggressiveness -- today, it's a degree in computer programming," says Sanders of the qualifications required of modern-day traders. "We just can't find enough of these people. That's why we're doing the Olympiad -- to promote trading technology."
Who Needs Experience?
According to Sanders, IB gives the students access to its application-programming interface (API) used for program trading. The students can create programs using Excel, Java, C++ or Visual Basic. "Someone who is pretty good at Excel macros or Visual Basic applications today could certainly participate," says Sanders.
"The technology is much more important" than trading experience, suggests Sanders. "[Last year's] winner, Patrick Christmas, is a programmer that had no trading experience," he notes. Christmas, a University of Texas graduate student, made $120,000 in the stock market as part of the trading contest. IB tried to hire Christmas, who was a part-time student with a full-time programming job, Sanders notes, but he was happy living in Texas and declined to move to IB's locations in Greenwich, Conn.; Zug, Switzerland or Hong Kong. However, IB hired two other students who did well in last year's Olympiad. "We interviewed them and we liked what we saw," he says.
The firm is talking to participants in this year's contest about full-time jobs and internships, according to Sanders. "This is more preferable" to conventional recruitment techniques because "it shows initiative," he contends.
"By doing this, you're kicking the tires," Sanders adds. "If someone is going to show up and create a program and run the trading, it's certainly better than getting a resume." Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio