The players are two cash rich fund managers, two cash-poor investment banks, two banks, a settlement agent and the market. Each game involves a number of rounds for trading outright bonds, repo and bank loans. Settlement is quasi-real-time. There are 5 bonds of varying liquidity in the market, streaming prices and bond certificates…everything needed to simulate a basic bond market.
The market moves, settlements fail, profit and loss is made and at times tempers get a little frayed! The positions at the end of the day are carried on to the next game. And as everyone gets better at it, more trading options and market anomalies will appear in the future.
The Anvil Trading Game began as a way to help employees at Anvil gain more of an understanding of the financial markets and what happens on trading floors. It has proved to be very popular amongst the employees, both newcomers and “old hands”.
Neil Mohoboob joined Anvil in November after completing a BEng in Mechanical Engineering with Bio-Engineering followed by a one-year’s Masters in Information Technology both at UCL. He said,
“The trading game has given me an insight into how Anvil’s software is an integral part of trading and has given me much more of an understanding of the markets. By being any one of players, the pressure of the trading environment is soon felt. The real time data calculations add to the authenticity of the market, and you have to pay attention to detail at all times. The calm before and after the session is in stark contrast to the hectic trading that materialises during a day on the trading floor.”
You might think that Anvil would run the game on their own it’s own superior trading systems, but in fact it is all manual with paper tickers, blotters and physical settlement. Director Malcolm Clark, the ex-trader who created the game, explained, “The best way to understand what actually goes on in the markets, and the importance of focusing on the details when trading, is to have a manual process. Technology liberates traders. But to utilise the power of a good front-office trading system and have the most efficient and effective trading operation, you need to fully appreciate the mechanics of trading and settlement.