The career of a trader can only be learned through the experiences of managing real capital. Trying to learn how the markets really work, how one’s emotions play into the decision-making process and taking the risks of managing real capital are not the realm of academia.
That all changed when successful commodities trader Rotchford Barker, former director of the Chicago Board of Trade (CBOT) and alumnus of the University of Idaho, provided an endowment and the direction to found the Barker Capital Management and Trading program (BCM). Set up through the College of Business and Economics at the University of Idaho, the program has now expanded to include a partnership with the College of Agricultural and Life Sciences (CALS) with the purpose of training students in trading and risk management.
“I thought it was important to bring the classroom into a practical real world experience,” says Barker. “Risk has become such a huge thing, [but] with risk comes opportunity. By students [learning] to understand risk it will give them a huge advantage.”
The most unique part of the program is the idea that experiential learning is the only way to teach a trading program and that is what employers want. Students learn this through the management of an advisory group and individual portfolios. Those students that show the desire and knowledge to make it through the filtering process are given their own accounts with real capital to manage.
The program, founded in 2003, focuses on portfolio building, trading risk management and commodity risk management, and features a real trading floor. There are currently 12 individually funded traders, however, there are many more that advise on portfolios or manage as a group.
It is one of the few college programs that offers trading real capital. The program is actively looking to expand to other schools.
The ultimate vision of the program is to introduce students across the interdisciplinary landscape to trading and risk management with the use of real capital to give the student the skill and experience that is sorely lacking within academia. This experiential learning of the financial and commodity markets enables students to explore equities, options, futures, forex, fixed income and spreads. It lets them experience the pitfalls and mistakes before they hit the job market. This gives them a marked advantage over their peers looking for the same jobs. For those that it applies to, it allows them to take that knowledge back to their family farms or businesses.
Access is available through the business or ag school. Students have to apply and be accepted. Many of the students become interested or learn of the program from a trading competition held every year with cash prizes for the best returns. The courses are credited. Within the business school most of the students are finance majors, with a spattering of other disciplines.
There is a designated trading room within the school of business that has a Bloomberg machine in which the students get certified (see “U of I U.S. Bank Trading Floor Features”). There are 15 trading stations, three large flat screens and a price board. There are scheduled seminars and classes taught in the trading room, but outside of those times it’s available for the students to use for research.
The goals of the program are to:
- Introduce student to trading and risk management strategies.
- Enable exploration of markets for securities, options and futures.
- Promote interdisciplinary cooperation across the land grant elements of the university.
- Create job and career opportunities.