1. The trading game simulation was originally developed by BP as a graduate recruitment exercise to enable BP employees to observe players’ behaviour.
In addition to seeing how quickly players pick up the basic knowledge and skills necessary to be a successful commodities trader, employees can monitor how players react and work together as part of a team.
It has now been adapted as a resource to teach the principles of enterprise to 14 – 19 year students.

3. Olympic Committee and Team USA
United States
Olympic Committee and Team USA
An important aspect of the game is the application of three of the seven Olympic and Paralympic Game Values, in particular determination, respect and excellence.
These Values are also applicable in contexts outside of sport - they are important qualities that can contribute towards success in a business context.
Work in trading demands innovative thinking, an entrepreneurial spirit and a capacity to relate well with colleagues.
In playing the game you need to demonstrate a ‘can do’ attitude, a willingness to take initiative, and the ability to make reasonable risk and reward assessments
It is essential that you communicate and work as a team
© iStockphoto

4. gasoline, diesel and other useful products.
© iStockphoto

5. Supply can be affected by geopolitics or weather events
Supply can be affected by geopolitics or weather events. In active hurricane seasons, for example, Gulf of Mexico oil production might be interrupted for long periods, reducing the flow of oil from those sources.
Demand can be affected by something as simple and predictable as a change of season (which is why gasoline tends to cost more in the summer, when more people drive long distances) or as complicated as people’s reactions to environmental challenges.

6. © iStockphoto

7. Pause while students assign each other roles
Each company can be made up of 4–6 team members (4 is the ideal size).
There should be only one company Chair. The Accountant and Market Analyst roles can be played by more than one student.
All members need to work together to help each other and to reach a team decision.
Today each team has an adviser
The Advisers are not here to give you the answers but to help you think through the issues. They are experienced and you should listen carefully to their opinions.
Pause while students assign each other roles
When playing Game at BP site:
Presenter is the Controller
Laptop operator is the Assistant Controller
Extra employees join the student teams to act as a professional Adviser.

8. Trading rounds:
Each trading round lasts for four minutes
Teams must keep within this time limit
Each team must have presented their Trading request form to the Assistant Controller by the time trading finishes for that round.
Teams must trade in increments of 10 lots
The team’s position must be flat at the end of the Game

9. Spend most time on this slide
Market View
‘Feeling bullish’ is an expression used when traders expect that prices will go up.
‘Feeling bearish’ is an expression used when it is expected that prices will go down.
Market Position
Long – you have bought more than you have sold. You take this position if you think the that prices will rise
Short – you have sold more than you have bought. You take this position if you think that prices will fall
Flat – neutral
Risk
This is largest when your position is close to either end of the spectrum
This is lower when your position is close the middle of the spectrum

10. Trading rounds:
Each trading round lasts for four minutes
Teams must keep within this time limit
Each team must have presented their Trading request form to the Assistant Controller by the time trading finishes for that round.
Teams must trade in increments of 10 lots
The team’s position must be flat at the end of the Game
Balancing:
If team is short at the end of the Game:
There is a final trade to balance their position
This is deducted from their final cash (number of lots short x final market price).
Penalties of $5 per barrel short are also incurred.
If team is long at the end of the game:
No income is gained from this final trade
Penalties of $5 per barrel long are also incurred.

11. Each trading round will begin with the presentation of a news flash and price update.
Consider the impact that this news might have on the supply or demand of the commodity, and how this might affect the price in the next round.
The price shown alongside each news flash, is the one that teams will be buying or selling oil for during that round.
Do you think the price will go up, down or stay neutral?
Does your company feel confident enough about the market to take a large risk, small risk or no risk at all?

12. The oil market can be extremely volatile.
The news bulletins will advise the oil price for each round
The final market price is the price that will be revealed during the final Trade out round (round 4 during the practice rounds, and round 7 during the trading rounds)

13. Ask the students to refer to the completed example of a Trading request form in their Traders’ pack.
Record keeping is essential in trading.
The Trader within each team must complete a Trading request form for each trading round. This is used to detail the number of barrels their company wants to buy or sell. They must hand this to the Assistant Controller before the end of the round.
Each company’s trading record will be entered electronically into the Market Results spreadsheet by the Assistant Controller.

14. Spend some time going over this slide
Ask team’s to refer to the completed example of a Financial report in their Traders’ pack.
The Financial report form, will help teams keep track of their position throughout the game, so they don’t trade outside of their limits
They do not need to hand this in during the game.
Their funds will increase as they make more profit – and vice-versa.
Accuracy is vital.
They can use the calculator provided.
At the end of the game, each company must complete the table at the bottom of the report and hand this in.

15. Schedule
1. Practice Rounds
Go to News Bulletins for Practice Rounds
3 practice rounds and then reveal final market price – for final Trade out round.
2. Trading Rounds
6 trading rounds, and then reveal final market price – for final Trade out round.