April 24, 2008 — How well would you manage a multi-million-dollar hedge fund? More than a dozen teams of U.Va. students will find out on Friday morning at the fifth annual McIntire Hedging Tournament, sponsored by Wachovia. The event will be held from 10 a.m. to noon in the McIntire School of Commerce's Robertson Hall Capital Markets Room.
Hedging is a hot topic in finance. To "hedge" means distributing investments in stocks and other securities in order to reduce the risk of adverse price movements. Typically, hedging is done by taking an offsetting position in related securities, such as options, other stocks or futures.
The contest will happen in a state-of-the-art stock-trading room in the McIntire School of Commerce's new Robertson Hall, equipped with large video screens that chart stock prices and investment performance of the student teams. Six month's worth of stock market movements will be squeezed into three hours, with a simulated day of activity passing every 60 seconds — fast enough to keep the student traders glued to their computers as their custom-written software executes trades by the second while they decide whether to maintain their current strategy or try to shift on the fly.
Winning teams will take home an iPod Touch.