Interactive Brokers Reports Trading Contest Results

Interactive Brokers (IB) reported the results of its 2007 Collegiate Trading Olympiad with the top three winners creating automated trading programs utilizing different strategies with stocks and options and futures.

Brian Eckerly, 22, who won first place, received $100,000 in prize money. Eckerly recently graduated from Ohio State University with a degree in electrical and computer engineering. Eckerly traded a mix of stocks and options, using S&P 500 ETFs and the options on that, earning a profit of $294,190."It was a contrarian strategy which looks to identify price extremes and then bet against them," Eckerly explains in an interview with Advanced Trading. If the market has gone up too much, Eckerly would bet the market is going to retreat. "And if it's gone down, I would bet that it's going to go up," says Eckerly, who has dabbled in looking for stock picks and short-term trading since he was seventeen.

Second place winner, Konstantinos (Gus) Tsahas, won $50,000 from developing a system based on electronic futures trading. "I trade every instrument there is," says Tsahas, naming a diverse list of futures ranging from wheat to gold to stock indexes such as the S&P and Nasdaq e-minis, to currencies and bonds.

Tsahas whose system earned a profit of $160, 524 - is currently enrolled in City University of New York (CUNY) Baruch College's masters in financial engineering program and is due to graduate in May. He also owns his own business located in Long Island City, New York in technical construction services - building TV studios, computer rooms, laboratories and trading rooms.

"You've got to be able to take on more risks because this is a contest," says Tsahas who worked in Lehman's Brothers IT department from about 1985 to 1990 and has began trading in the days of the SOES bandits. When DMA became available in 1998, he shifted to systems trading.

"It takes quite awhile to get one of these systems up and running," says Tsahas, who worked on his system for several months before entering it into the contest. " I developed it in Java and it automatically released orders based on certain things in the market," says Tsahas, "The trick is you have to pick what your strategy," says the Baruch student who says his is based on market pullbacks - buying after a one-week low in the market.

Another second place winner was Abraham Greenwald of Baker College in Michigan. He earned more than $110,041 in profits based on a strategy of buying cheap calls and if the market rises, buying cheap puts, according to Andrew Wilkinson, senior market analyst at the brokerage firm.

"The technical indicator has to be either extremely overbought or oversold and then it forced the program to buy products that were cheap," comments Wikinson.

Altogether, Interactive Brokers gave away $400,000 in prize money. Beyond the first and second place winners, who took in $200,000, the third place prize goes to ten students who received $10,000 apiece and the placing prize goes to 100 students, receiving $1,000 each.

The Greenwich, Conn. -based global electronic broker - which owns the market maker Timber Hill- sponsored the trading competition for the second year in a row. "This is an important field where there is a scarcity of applicants going forward," says Wilkinson. "The whole point about the Olympiad is to find people who know about programming, not about the markets," says Wilkinson.

Starting last fall, 204 students registered, which is a 60 percent increase above last year. Students had to design a program that would create automated trading systems in C++, Java, Visual Basic and Excel and VBA for Excel. The program collects market data, makes decisions and then transmits orders, notes Eckerly. Interactive Brokers lets the students use its API (application programming interface). "You're using a platform used by hedge funds and big traders. This is their full complement of tools that's available to everybody," says Tsahas.

But IB made the contest more challenging this year. "Last year we gave a prize to anybody who made money. Several people traded once and they made money and the program really didn't work," he says. This year, IB made constraints, stipulating that 25 trades must be recorded.

"They had to write that program and make it trade at least 25 times, explains Wilkinson. The traders were given $100,000 in play money and they were able to trade globally in stocks, options, futures, forex and bond products. "A lot of people thought the best way to do this was to leverage your money and go use options," notes Wilkinson. "There's no limit to the strategies you can enter. I looked through the individual strategies and some were multi-faceted," he says.

The question is will IB continue to offer the contest next year? According to Wilkinson, IB staffers will need to "negotiate with the IB's chairman, Thomas Peterffy, to see if the contest is worth the publicity and the hours we put into it and do we end up hiring these people," says Wilkinson.

Already IB is looking to forge relationships with colleges going forward to work on next year's Olympiad. So far, Baruch has expressed interest in sponsoring the contest, and a college professor from Oregon has offered to enroll his entire class in the contest. "I think if we can get an entire class to take part, we should be able to get 1,000 entrants," says Wilkinson.

One of the prime motivations for offering the competition is to highlight the need for tech-savvy students in the financial industry and to help IB recruit talent from academia. "We have all the resumes and we're actively recruiting," says Wilkinson.

But Brian Eckerly, who came in number one, already found a job as a data analyst with Capital One Auto Finance and relocated to Plano, Texas before the contest was over. "I definitely had it long before the end of the contest," says Eckerly. "I plan to stick with my job because I like it a lot," he says. Still, Eckerly doesn't rule out trading in the future and plans on doing some trading and investing. "I'm not going to spend the money. I think I'll invest most of the money," he says. 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