Best Practise in Using Finance Simulations in UK Higher Education

1. Best Practise in Using Finance Simulations in UK Higher Education By: Neil Marriott and Siew Min (Amy) Tan

2. Overview • A quick tour of TraderEx • Introduction • Guidelines: • Simulations infrastructure • Promoting trading simulations to students • Using trading simulations in teaching • Incorporating trading simulations in assessment • Possible improvements • Conclusion

3. A Quick Tour of TraderEx

4. Introduction • Finance, a highly theoretical subject with complex mathematical models, is a popular choice in UK higher education as evidenced by the significant increase in growth rate.

5. Introduction Students Growth Rates since 1996/97 (Adapted from Higher Education Statistics Agency 2012)

6. Introduction • Finance related simulations • new teaching trend in this subject area • enhance students learning experiences • encourage their engagement

7. Case Studies Scope of study

8. Simulations Infrastructure • Teaching facilities • Trading room • Trading software • TraderEx Simulations

9. Teaching Facilities • Trading room • Purpose-built • Virtual trading floor • “real” trading environment • Capacity is limited by number of computer terminals

10. Trading Software • TraderEx Simulations • Electronic trading system • Web-based • Highly reliant on the stability and speed of internet connection • Annual workshop

11. Promoting Trading Simulations to Students • Advertising on programme’s page • Open days • Taster session • Module outline • Other promotional channel • Students society • Six-form visit

12. Advertising on Programme’s Page

13. Open Days • Interactive session • Engage potential students • Engage parents

14. Taster Session • Taster session in Corporate Finance module (semester 1) • One-off two-hour workshop • Students found trading simulations interesting • Looking forward to Investments and Behavioural Finance module (semester 2)

15. Module Outline • Promote the idea of the trading simulations • Allow students to prepare for the sessions especially when the trading simulation forms part of the module assessment

16. Other Promotional Channel • Student Societies • Cardiff Business School: Cardiff University Finance and Trading Society • Winchester Business School: Investment and Trading Society • 6th forms visit (Cardiff Business School)

17. Using Trading Simulations in Teaching • Modules • Introduction to the simulations • Simulation type: stand-alone vs. network • Familiarising with the trading simulations • Scheduled teaching session • Trading guides • Post-simulation evaluation • Length of the simulation

18. Modules • Under- and post-graduate courses • Finance modules related to the market structure and the trading mechanism • Cardiff Business School: Financial Markets and Institutions module, undergraduate • Winchester Business School: Investments and Behavioural Finance module, postgraduate

19. Introduction to the Simulations • Discuss the underlying theory before introducing the simulations • About 10 to 20 minutes • Explain key information contained on the opening screen and other practical facts, e.g. difference between limit and market orders, actual versus target level of positions.

20. Simulation type: stand-alone vs. network • A stand-alone simulation means that students are interacting only with the software itself. • A network simulation allows students to interact among themselves and participate in the market influencing share price fluctuations

21. Familiarising with the Trading Simulations • It is advisable to provide students a reasonable time to familiarise themselves with the software • 30-minute stand-alone session • Students were encouraged to repeatedly operate the stand-alone session • To establish students’ confidence in trading and fostered their engagement in learning

22. Scheduled Teaching Session Time allocation for a 3-hour trading simulation’s session

23. Trading Guides • Students can become overwhelmed by the information contained on the trading screen. • Provide trading guides before the start of the simulation. • Students were encouraged to keep record of their activities using the guides.

24. Post-simulation Evaluation • To ensure that the students learned from the trading simulation • Display the Leader Board after each trading simulation and discuss with students

25. Length of the Simulation • Ideal length of the simulation: 2 - 3 hours • Allows students a reasonable duration to understand the mechanism and familiarise themselves with the system before the simulation begins.

26. Incorporating the Trading Simulations in Assessment • Types of assessment • Mock simulation • Alternative assessment

27. Types of Assessment • Winchester Business School: • Self-reflection report • Do not earn marks on how well they performed in the simulation • Simulation type: Network Quote Driven market

28. Mock Simulation • Lack of previous experience in trading simulations • Not confident with the assessment • Allows students to experience the “real” trading simulation without the fear of poor performance

29. Alternative Assessment • Possibilities of unforeseen technical issues • Prevented the operation of the network simulation • Alternative set of assessment using stand-alone trading simulation

30. Other Issues • Student engagement • Technical support

31. Student Engagement • Cardiff Business School • Tutor 1: Lack of assessment, students did not take them as seriously • Tutor 2: 20% assessment to ensure students are “learning”, positive feedback from students • Winchester Business School • Students engaged when they knew that it formed part of the assessment activities

32. Technical Support • Technical breakdown during the simulation session could be a dysfunctional learning experience for students • It is important to receive good and timely support from the software provider’s and university’s technical support team

33. Possible Improvements • Pre-simulation check • Support from the software provider • Community of practice • Variety of trading software • Continuing development workshop

34. Pre-simulation Check • Before operating the simulation for the purpose of assessment: • tutors are encouraged to make the university’s technical team aware of the session • to check the computer system and network

35. Support from the Software Provider • Before the assessment: • Contact the software provider’s technical team • Online software: subject to the stability of the provider’s server

36. Community of Practice • Community of finance-related simulations users in UK higher education • Information sharing • Mutual-benefits • Self-support group • New technology

37. Variety of Simulations Software • Trading simulations is becoming a trend for teaching finance modules • To encourage the practice of using simulation • More trading simulation packages

38. Continuing Development Workshop • Trading simulation: an effective way to encourage students’ engagement • Practical aspect: challenging, complex of software design and unpredictable technical problems • Attending workshops: improve the learning and teaching of using the simulations

39. Conclusion • Benefits of the trading simulation: • very helpful in stimulating students’ engagement in learning • enhancing employability of students • improving students’ satisfaction • increasing academic performance • useful tool in bridging the gap between theory and practice

40. Conclusion • Research limitations: • Two case studies • One type of simulation software • Recommendations: • More case studies • Other simulations • Cross-country comparison

41. Questions & Feedback