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Eckerly, who recently graduated from Ohio State University with a degree in electrical and computer engineering, traded a mix of stocks and options, using S&P 500 ETFs and the associated options, earning a profit of $294,190 during the nearly two-month-long contest. "It was a contrarian strategy that looks to identify price extremes and then bet against them," he explains. If the market went up, Eckerly would bet that it would retreat. "And if it's gone down, I would bet that it's going to go up," he says.
Runner-up Konstantinos Tsahas, who is to graduate with a master's in financial engineering from the City University of New York's (CUNY) Baruch College in May, won $50,000 for developing a system based on electronic futures trading that earned a profit of $160,524. "I trade every instrument there is," he relates, naming a diverse list of futures ranging from wheat to gold to stock indexes to currencies and bonds.
"It takes quite awhile to get one of these systems up and running," adds Tsahas, who worked on his system for several months before entering it into the contest. "I developed it in Java," he says, noting that his strategy is based on market pullbacks -- buying after a one-week low in the market. Tsahas, who owns his own technical-construction services business worked in Lehman Brothers' IT department in the late '80s.
Altogether, IB gave away $400,000 in prize money. In addition to the first- and second-place prizes, a third-place prize of $10,000 went to 10 students. A placing prize of $1,000 went to an additional 100 students.
Recruiting Programmers
The Greenwich, Conn.-based global electronic broker, which owns the market maker Timber Hill, sponsored the competition for the second year in a row. "This is an important field where there is a scarcity of applicants," explains Andrew Wilkinson, senior market analyst at the brokerage firm. "The whole point of the Olympiad is to find people who know about programming, not about the markets."
Starting last fall, 204 students registered for this year's contest, a 60 percent increase over last year. Students had to create automated trading systems in C++, Java, Visual Basic, and Excel and VBA for Excel that collect market data, make decisions and then transmit orders.
IB lets the students use its API (application programming interface). "You're using a platform used by hedge funds and big traders," says second-place finisher Tsahas. "This is their full complement of tools."
Traders were given $100,000 in play money and were able to trade globally in stocks, options, futures, forex and bond products. "There's no limit to the strategies you can enter," notes IB's Wilkinson. But IB made the contest more challenging this year. "Last year we gave a prize to anybody who made money," he says. "Several people traded once and they made money, [but] the program really didn't work." This year, IB stipulated that each program had to record at least 25 trades.
One of the prime motivations for holding the competition is to help IB recruit tech-savvy talent, Wilkinson notes. "We have all the [contestants'] resumes and we're actively recruiting," he says.
But will IB continue the contest next year? IB staffers need to "negotiate with 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," Wilkinson comments.
Top finisher Eckerly already secured a job as a data analyst with Capital One Auto Finance in 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." Still, he doesn't rule out trading in the future. "I'm not going to spend the [prize] money -- I think I'll invest most of the money."
