University of Bath Finance & Investment Society

Welcome to BFIS 2008-2009.

Whether you have a genuine interest in Finance or just a curiosity in
what is making all the recent headlines, Bath’s only Finance society is
for you! The Bath Finance and Investment society : BFIS, is a
relatively new society undergoing exciting times offering a range of
opportunities to all of its members.

In previous years we have managed to attract key guest speakers,
participated in international simulation games, held workshops and
played trading games on campus.

However, this year we plan to offer even more, and this is starting off
with a social this coming Wednesday evening,08-10-2008, in the
Claverton rooms, 7-10pm. Fine wines will be available and a simple yet effective trading game will be taking place.

This will be a fantastic opportunity to meet like minded people,
discuss current issues and network with members. As a member of BFIS, you are invited to attend for free!

We look forward to seeing you all!

BFIS committee

Dear Members,

We are able to offer you two talks in March from some very high profile speakers:

04 March, Tuesday, 2:15-4:00 pm, University Hall:

Mr. Robert Burgess, a Director at the UK private equity firm Montagu Private
Equity that spun out of HSBC in 2004 and has over £4 billion under
management, will give a talk on the private equity industry, how it works,
how it affects the British economy and how best you can prepare for a career
in the sector.

11 March, Tuesday, 2:15-4:00 pm, University Hall:

Mr. Raoul Hughes, is a Partner and Chief Financial Officer of Bridgepoint, a
major private equity manager with a 25-year track record of investing in
European businesses that has raised £6 billion from leading institutional
investors. Mr. Hughes will talk about private equity market developments.

Best Wishes

The Committee

We are delighted to announce our first sponsorship agreement with a major global Investment Bank - Deutsche Bank for the academic year 07/08

Hi,

I just discovered this from efinancialcareers

Online investment challenge by RWE Trading.

http://efc.stocktrak.com/rwechallenge/

As promised in March, we are finally disclosing our Merrill Lynch Investment Challenge report. Apologies for the delays.

The report was not judged to be high enough quality to proceed to the final rounds
Get the report

Dear Memebers,

We elected a new committee for the academic year 07/08

Our new committee is as follows -

<CHAIRS>
MICHAEL OKUSI
JIE ZHAO

<VICE-CHAIRS/TREASURERS>
ADAM PRINDIS
DAVID NEWELL

<SECRETARY>
JIE ZHAO

<EVENTS>
JIANG GU
JAMES HINDER
SIMON WALSHE

NOTE:
For the next academic year, David Newell(3rd year Business Admin.) will
be the Vice Chair for the first semester and Adam Prindis(2nd year
Business Admin.) will be the Vice Chair for the second, due
to their placement arrangements. While they are out, they will be assuming the
responsibility of Treasurer.

Dear Members,

Thank you for attending the Talk/Lecture from Chris Coles, Barclays Capital on Leveraged Finance and Private Equity.

We certainly hope it was a thoroughly enjoyable and informative afternoon for you.

As some of you have requested, I am uploading the powerpoint presentaion.

Download

Dear members,

We have arranged for a guest speaker, Head of Leveraged Finance, from Barclay’s Capital, the investment bank, to give a lecture on campus on Thursday the 22nd of March at 4.00. This will take the form of an informal lecture where you will be given the chance to learn more about the different areas within an investment bank particularly covering the latest private equity buy-out frenzy followed by a Q & A session.

This is a perfect opportunity for you to learn more about Investment Banking and raise specific questions regarding the career and what it involves at every level.

Location: 3WN 2.1
Time: 4:15
Date: Thursday, 22 March

We look forward to seeing you on the day.

Sincerely Yours,

Finance and investment society.

Sign Up – entrants may sign into the league up until Sunday evening 9pm (March the 4^th). However no trading in the FX markets is allowed until the markets open on that Sunday.

What is Foreign Exchange (FX) Trading?

In finance foreign exchange means currencies which are traded by institutions, companies, speculators etc. on the open market. At present an average of $1.9 trillion dollars is traded across the globe in the FX market on a daily basis.

An important component of this market is speculators (traders), who players of this game will be imitating for a two week period. Their aim is to analyse information (primarily economic and political) hoping to predict the future price movements and trends of currency pairings. They then assume positions in the market which allow them to take advantage of these price movements to generate a profit.

Signing up to Bullbearings – www.bullbearings.co.uk

We will be playing the trading game on the above website; this mirrors the currency markets and allows real time trading i.e. 9pm GMT Sunday until 10pm GMT Friday. To sign up go to the website select the ‘join now’ option located in the horizontal blue tab bar bellow the advertisement banner. Fill in your personal, login, miscellaneous and university details, you only need to fill in the red * boxes but please fill in which university you attend, you have now opened your virtual trading account.

Joining the League

Clicking ‘summary’ in the blue tab under the banner brings you to the main page from which you will direct your account. In the column of options on the left click ‘your league options’. In the middle of the displayed page is join league option –  click ‘W’ and scroll down to the league WBF – FX Trader 07 and click join the league, enter the password – ‘Merrill Lynch’, capitals required.

Price Quotes

Just like in all markets, there are two prices for every currency pair. “BID” price on the left and the ASK (or offer) price on the right. The difference between these two prices is the spread, or the cost of the trade.

GBP/USD 1.7995 – 1.7999

Most currencies are quoted to four decimal places (with the exception of the Japanese Yen which is 2) you can see here that the difference is 4 units , each unit of price is known as a pip, so the difference is 4 pips.

Placing Trades

Because you can trade A) long or B) short you have two options with each currency pairing, A) Buy (long) – in the expectation that the exchange rate will rise B) Sell (short)– in the expectation the exchange rate will fall.

Example 1: BUY - Long Trade

Example 2: SELL - Short Trade

You will see that the profit of a trade is always calculated in the second currency. If you are trading an account that is denominated in sterling, this profit will then need to be exchanged back into sterling using the current exchange rate.

To place a trade access you FX portfolio (summary → fantasy FX) and above your current open positions click a light blue bar titled ‘place FX Trade’. Use the drop down tab or list to choose the currency pairing you wish to trade e.g. GBP vs. NOK – Norwegian Krone. Data on the current bid / ask price is now displayed and a graph of recent price movements. Above the graph of recent activity select the blue tab ‘trade this currency pairing’. Select the value and type of trade you wish to process, clicking ‘trade’ will process the trade however you are able to set limits upon your trade using features explained below:

Stop and Limit Orders

Because of the geared nature of trading on margin, the volatility of the FX Market and the fact that it trades 24 hours a day, it essential to have access to facilities that let you open or close positions if certain levels are reached.

Limit Order

A Limit order is one that is executed at a better price than the prevailing market price, i.e. for a Long FX Trade when the quoted currency drops to a certain level or for a Short FX Trade when the quoted currency rises to a certain level.

Stop orders

A stop order is one that is executed at a worse price than the prevailing market price one of the most common uses of this is a stop loss order. It is possible to make substantial profits when trading FX as well as substantial losses which is why many FX providers allow you to place a stop loss when you open a trade:

Stop Loss

A stop loss is a price level set by the client on a particular trade that if reached automatically closes out the particular position at the desired price.

Leverage - Trading on Margin

Trading on margin means that a trader can utilize more capital than they have in their account. The volatility of currency pairs is usually less than other markets, such as futures and equities. Since there is less movement, traders leverage their capital to make money on smaller moves. The amount of margin available in Forex is as high as 1% (100:1 leverage), and generally up to 2% (50:1 leverage).

If you were to trade £100,000 GBP/USD you would be required to have at least £1000 at 1% margin or £2000 at 2% margin in your account to open the trade. Trading on margin is a double edged sword. You can lose money equally as fast as you make it. It is therefore vital to have a full understanding of the FX market and not commit too much of your equity to each trade.

Useful Websites

BullBearings provides guides and research which is provided in the left hand column of your virtual trading account. Also provided below is a list of useful links which may also assist you when making your trading decision.

Financial Times – this paper will provide valuable information.

FT Website - www.ft.com – full access to this website will be available through your libraries.

BBC news – Website provides economic news and market data.

UBS FX Strategy and Research, very technical - http://fxtrade.oanda.com/resources/ubsnews/index.shtml

Bloomberg - market data and news- http://www.bloomberg.com/

Winners
The winning university will be the university with the highest average portfolio at the end of the two week period. The individual winners will be those people with the highest portfolio values at the end of the two week period.

 Note – BullBearings allows participants to trade in markets other than Fantasy FX, if a player chooses to speculate in these markets it is there choice. However it will have no effect on the FX league table and so will not influence the outcome of the game, for this reason I would advise players to focus on the FX markets.

FX Trader 07

Fancy £100,000 to play with, no strings attached?

Warwick Banking and Finance Society are hosting FX Trader 07, a great way to experience the thrill of the Foreign Exchange markets for all levels of experience.

• Sunday March 4th – Friday March 16th
• Large cash prizes for the individual winners
• Real time trading mirrors the actual foreign exchange markets
• Represent your university as a potential trader of tomorrow.
• To sign up see the user guide attached

This year we will be competing against Oxford, LSE, Bath, Durham and St.
Andrews.

Download the Userguide and a document on how the exchange rates are determined.