Canadian Derivatives Exchange*

Options Trading Simulation

Interest rate derivative trading will cease at 1:30 p.m. today, August 1, 2014. Furthermore, the Exchange's markets will be closed on August 4, 2014 (Civic Day).

General information and registration

Eligibility conditions

Each team must be enrolled in a full-time undergraduate program, specializing in finance (or any other related discipline), in Canada.

Team composition

Teams must be composed of one to five participants. There is no limit to the number of teams by university or faculty.

Free registration

Complete the registration form.

Registration deadline

Friday, January 24, 2014, at 5:00 p.m. (EST)

Simulation description

Initial parameters

  • Each team is given a virtual cash account of $100,000 to build their options portfolio.
  • This nine-week Options Trading Simulation is held during the 2014 winter term, from February 3, 2014 to April 4, 2014.
  • Each team is strongly encouraged to attend a classroom presentation hosted by their university's student ambassador on January 30, 2014, at 5:00 p.m. (EST). This education session will focus on the mandatory components of the simulation, the options trading strategies, and the trading simulator functionalities. This presentation will be followed by a live question period through webcast.

Mandatory components

  • To construct their options portfolio, each team must choose at least five Canadian options classes from 30 of the most active securities on the market.
  • Each mandatory strategy must have a minimum notional value of $5,000 or 10 options contracts. There is no minimum holding period required.
  • Mandatory strategies must be traded in a single transaction, and not by legs. To do so, select the appropriate strategy in the "Transaction Type" field of the Trading Simulator, failing which the mandatory strategies will not be recognized.
  • All positions must be liquidated before market close on April 4, 2014. Each team with open positions after the last trading day will be disqualified.

Mandatory strategies

  • Each team must execute the following four predefined options trading strategies:
    • Long put
    • Secured put
    • Long straddle
    • Bull call spread
  • Each team must execute a surprise strategy that will be unveiled by email on the 2nd trading week. The email will include a link to access the video explaining the strategy starting on February 13, 2014, at 4:00 p.m. (EST). A question period through live chat on Facebook is planned on February 14, 2014, from noon to 1:00 p.m. (EST).

Winners

The three winning teams that have respected the mandatory components while accumulating the best return after nine trading weeks will be awarded a 1st prize of $10,000, a 2nd prize of $5,000 and a 3rd prize of $2,500 from the Montréal Exchange.

The best performing team per university as well as the 50 best teams in the canadian ranking that have respected the mandatory components will receive a certificate of participation.

Equity option strategy sheets

Guides and strategies offered by the Montréal Exchange are available on the website for your reference.