Articles

Muma Trading Challenge 2017 Winner: Matthew Henricksson, Finance PhD Student

By Keith Morelli

Matthew Henricksson and Jianping Qi

TAMPA (May 2, 2017) -- The gavel has fallen and the financial dust has settled on the 2017 version of the Muma Trading Challenge. Emerging at the top of the heap was Matthew Henricksson, a first-year finance PhD student who made more than $300,000 in virtual cash in three months.

The challenge involved a simulated stock-market trading competition in real-time.

Henricksson's bulging portfolio won him $1,000 in scholarship money. This is the third time the challenge has been offered and more than 200 students signed up at the end of January to compete.

"I am very excited to be receiving the $1,000 scholarship," Henricksson said. "It will be helpful in reducing the financial stresses that come with being a PhD student."

Each competitor was staked $1 million in virtual money with which to invest. Henricksson's paper investments ended up in a portfolio value of $1,363,020.

"In general, my investment strategy was to take risky future positions on exchange-traded funds that had performed well recently," he said. "The general concept of following recent top-performers is known as 'momentum,' which I learned about in Dr. (Jung Chul) Park's finance theory class last semester. I focused on ETFs rather than individual stocks to reduce firm-specific risk and because I didn't have time to research several individual companies."

It's not a strategy he would recommend for the average investor, however.

"Investing in futures can come with high risks," he said. "Because the trading challenge is a winner-take-all competition over a short-time horizon, a conservative strategy is not ideal. Many of my competitors figured this out as well. In fact, my final return percent of about 36 percent was not the highest throughout the competition.

"A few players managed more than 50 percent returns at various points in the game, so knowing when to sell was very important as well."

A total of 223 Muma College of Business students participated in the challenge and no experience was necessary to compete. The range of profit/loss went from Henricksson's 36 percent profit to one investor's 70 percent loss.

Entrants were allowed to trade as they wished, though they were required to have at least 25 trades.