Canadian Derivatives Exchange*

Options Trading Simulation

Registration and general information

Registration deadline

Friday, February 10, 2017, at 5:00 p.m. ET

Eligibility conditions

Each team must be enrolled in a full-time undergraduate or MBA program in Canada.

Team composition

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

Simulation description

Initial parameters

  • Each team is given a virtual cash account of $100,000 to build its options portfolio.
  • This ten-week Options Trading Simulation is held during the 2017 winter semester, from January 30, 2017 to April 7, 2017.
  • Participants can still register during the two first weeks of trading until February 10, 2017.
  • Each team is strongly encouraged to attend an education session hosted by their university's Student Ambassador between January 30, 2017 and February 3, 2017. Date and time will be determined a week prior the event depending your university. This education session will focus on the mandatory components of the Simulation, the options trading strategies, the trading simulator functionalities as well as the alerts and quotes.

Mandatory components

  • To construct their options portfolio, teams must choose at least 10 Canadian options classes from the 100 most active Toronto Stock Exchange securities.
  • Each mandatory strategy must have a minimum notional value of $5,000 or 10 options contracts. No minimum holding period required.
  • Each initiating stock and options transaction is limited to a maximum of 5,000 shares or 50 options contracts in the same options series.
  • Mandatory strategies must be traded in a single transaction by selecting the "Transaction Type" field of the Trading Simulator, and not by legs.
  • Each team can receive a maximum of five margin calls during the Simulation.
  • All positions must be liquidated before the market close on April 7, 2017.

Mandatory strategies

  • Each team must execute the following four predefined options trading strategies:
    • Covered call
    • Bear put spread
    • Strangle
    • Butterfly call
  • Each team must execute two surprise strategies that will be unveiled by email on Wednesday, February 22, 2017 and Wednesday, March 22, 2017 at 4:00 p.m. ET.
  • Participants have to comply with all the mandatory components and strategies to be eligible for prizes.
    For more details, please see the Rules for the simulation.

Winners

The top 3 teams having achieved the best returns, while fulfilling all mandatory components after a maximum of 10 weeks of trading, will be awarded a 1st prize of $10,000, a 2nd prize of $5,000 and a 3rd prize of $2,500 respectively from the Montréal Exchange.

The best performing team per university as well as the top 50, having fulfilled all the mandatory components, will receive a certificate of excellence.

Equity option strategy sheets

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