FEC FINANCIAL ENGINEERING CLUB. WHAT IS FINANCIAL ENGINEERING?  Multidisciplinary field applying mathematics, engineering methods, and programming techniques.

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Presentation transcript:

FEC FINANCIAL ENGINEERING CLUB

WHAT IS FINANCIAL ENGINEERING?  Multidisciplinary field applying mathematics, engineering methods, and programming techniques to financial theory.  Traditionally, mathematical modelling of financial phenomena that is implemented via some programming language.  Nowadays, can refer to any application of technical tools to finance.  Traders  Quants  Software Developers

MEAN REVERSION  Idea – If two securities are co-integrated and they diverge in price, they should eventually converge to their normal ratio.  Mean Reversion strategies capitalize on this idea by buying the underpriced security and shorting (selling) the overprice security.  We assume that the overprice security will fall in price and/or the underprice security will rise in price.  When this happens, liquidate your position.  $$$  The strategy is market neutral, such that the trend of the overall market will not result in huge losses or gains.

MEAN REVERSION

ABOUT THE FEC

 We are a society of students interested in quantitative trading.  We come from a variety of challenging majors that include undergraduate and graduate students.  We have worked at / have contacts at banks, trading firms, hedge funds, and technology firms.

FALL SEMESTER PLANS Interview Preparation Educational Lectures Strategy Demonstrations Software Workshops Talks from Experienced Individuals Open-Source Projects and Resources

INTERVIEW PREPARATION  Prepare for technical interviews through workshops and mock trading sessions.  What is the probability that if you role two six-sided dice, their product is a perfect square?  2/9  What is the expected value of the product of number of heads and tails of ten randomly flipped coins.  22.5

EDUCATIONAL LECTURES AND WORKSHOPS  Learn the material of restricted upper level finance courses.  Lectures given by our members or posted online for your reference.  Workshops on strategies to teach you how to trade by yourself!  Hands-on workshops on software tools and trading platforms.

OPPORTUNITIES TO GET INVOLVED Projects Develop valuable programming experience! Research projects Education Committee Help create lectures on academic and industrial topics. Information Committee Help maintain the FEC news blog.

EDUCATION COMMITTEE Master students Create and present lectures Great opportunity to improve presentation and communication skills Undergraduate students Create online education materials Work with master students with lecture preparation Have basic knowledge in finance or programming Check for application!

PROJECTS  The FEC will source project ideas, provide templates for, and lead teams on projects:  Examples:  Develop an automated trading strategy  Build a poker playing bot.  Develop a trading platform. 

RESEARCH OPPORTUNITY Form a Group Several topics to choose from. Utilize the knowledge in quantitative trading to lead undergrad students to explore. Create Your Own Project FEC will provide you a platform to share your idea for potential projects!

INFORMATION COMMITTEE  See financial applications in the real world  Weekly newsletter/blog on finance related news articles  Inform members of campus events  Talks, presentations, recruiting  Present current event topics  Give short talks on relevant material, i.e. HFT  Website managment and development Check for application!

TRADING COMPETITIONS  MIT Fall Intercollegiate Trading Competition—Nov 2014 (sign-ups open!)  Rottman Trading Competition – Spring 2015  U-Chicago Midwest Algo-Trading Competition – Spring 2015

DUE PAYING MEMBERSHIP BENEFITS Access to tick level market data and level 1 quotes (bid/ask) Over 1000 US Equities of the last 50 days and counting: Eligible for executive board and committee positions Field TripsResume Book

UPCOMING EVENTS

THANK YOU!  Website:  Facebook:  LinkedIn: 