Katz Business School introduces new trading room

‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ Pitt’s Joseph M. Katz Graduate School of Business’s most recent… ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ ‘ Pitt’s Joseph M. Katz Graduate School of Business’s most recent investment isn’t on paper. It’s in the walls. ‘ ‘ ‘ The school’s $2.3 million trading room, which opened this summer, is a small-scale simulation of Wall Street. The classroom allows Katz students to analyze current and historical financial data and use software to build and test investment portfolios. ‘ ‘ ‘ ‘We’re bringing markets into the classroom,’ said Kuldeep Shastri, a professor of business administration at Katz. ‘ ‘ ‘ The unveiling of the trading room will take place on Oct. 3. The board of visitors, trustees, alumni and faculty are invited to the demonstration, given by Shastri and Thomas, and to the reception following. ‘ ‘ ‘ Classes in experiential learning for both graduate and undergraduate students began in the laboratory Monday. ‘ ‘ ‘ In the spring semester, Shastri will teach two classes that were kept in mind while designing the functionality of the trading lab. ‘ ‘ ‘ Surrounded by a floor-to-ceiling glass wall, the 3,000-square-foot trading lab in Mervis Hall features stock tickers, live news feeds and LCD screens showing real-time prices. ‘ ‘ ‘ The room holds 58 seats, each seat equipped with a dual-monitor computer station. ‘ ‘ ‘ ‘Students can see the way markets are organized and understand how prices evolve,’ said Shastri. ‘ ‘ ‘ During a trading simulation, students have the option to see news on one monitor and the price of the stock on the other. The professor essentially controls the price of the stock and makes announcements, changing the structure of the market. Then students must change trading strategies based on announcements. With one keystroke, the professor can call any of the student screens in the class and display them on the two large drop-down screens at the front of the room. ‘ ‘ ‘ ‘ Pitt is not the first schools to invest in a trading lab. Trading rooms first appeared on college campuses more than 10 years ago, when MIT’s Sloan School of Management opened its facility in 1996. ‘ ‘ ‘ ‘Most schools have the same set of features,’ said Shastri. ‘But what is most important is how the professors teaching the classes incorporate the lab.’ ‘ ‘ ‘ Carnegie Mellon University, one of the first schools to open a trading room, quickly dismantled its facility after the school deemed a space dedicated solely to trading unnecessary after it became a requirement for all students to own a laptop. ‘ ‘ ‘ There is no fear of a similar dismantling at Pitt, since the software in the trading room is exclusive to a laboratory and cannot be used on a laptop, said Shawn Thomas, professor of business administration at Katz. ‘ ‘ ‘ ‘Students simulate a Wall Street trading room with the same software packages used by Wall Street firms,’ said Thomas. ‘ ‘ ‘ Training in a lab stocked with software used by professional investors around the world, such as Reuters, Morningstar and Value Line, better prepares graduates for careers in finance because they are already familiar with real-world software upon entering the job market. They already have a feel of the floor. ‘ ‘ ‘ Graduate students also have the opportunity to work with real money. ‘ ‘ ‘ Behind the large trading room is a newly constructed space devoted to the Student Management Investment Fund, where students manage a portfolio and make investment choices. ‘ ‘ ‘ Not only is a trading room an asset to students, but also to the school as a whole. ‘ ‘ ‘ ‘The lab is a toolbox for the school,’ said Thomas. ‘ ‘ ‘ On top of providing hands-on learning for students, the addition of a trading room serves as valuable marketing, development and recruitment tools.