International Management students pass exam on Chicago Mercantile Exchange (CME)
International Management Master students of MA-IM-22 and MA-IM-22_1 successfully passed their introductory exam to trading futures and options on the Chicago Mercantile Exchange (CME).
Students learned how to hedge and speculate with commodities, such as crude oil, natural gas, metals, agricultural products, currencies and cryptocurrencies, while also learning how financial leverage magnifies risks and returns.
In this elective module “International Financial Markets and Products”, students also learned four bond trading strategies and were able to demonstrate their newly acquired skills at the University of Virginia's bond trading simulator.
As part of their final project, students assumed the position of portfolio manager and used put options to hedge a $1 Mio. portfolio of Apple, Alibaba, Microsoft, Nio and Tesla stocks against a potential market downturn.
The final assignment also included creation of Excel-based option payoff diagrams for three scenarios including a 25% and 50% market decline and a 10% market rise.
“The entire process is fun and flexible. It's a combination of video and multiple choice questions. In this process, I have learned the similarities and differences between several ways of investing. I have also done simulations to improve my practical application ability. It is a very fruitful experience.” commented Daiting Han, who will graduate in 2023.
“Fintech applications such as Robinhood and TradeRepublic have made derivative trading much more accessible and popular, you could even argue options trading has gone mainstream with retail investors, at least for generation Z.
Also, international corporations use many more financial hedging instruments to insure themselves against increased market volatility of commodities prices and it’s not just the airline industry.
Students who bring initial experience with derivatives to potential employers offer a comprehensive financial skill portfolio and gain a competitive edge in the labor market.” concluded Klaus B. Zensen, Ph.D. who is a Professor for International Management at FHM Berlin.
