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Baruch Creates State-of-the-Art Trading Laboratory

Michael Forman
612 words
12 July 1999
Securities Industry News
English
Copyright (c) 1999 Thomson Financial, Inc. All Rights Reserved.


The millions of dollars that will soon flow electronically through the trading room at New York City's Baruch College will be simulated, but the systems that carry the money and the strategies to earn or protect those dollars will be real. And that's the way Professor Bruce W. Weber wants it. "You cannot overemphasize the impact technology has played on the markets," he said. "It has created a revolution, and one of the best ways to really understand that revolution is to put yourself in the middle of that information technology."

In September, Weber, a faculty member at New York University's Stern School of Business and an expert on the relationship between technology and financial markets, is moving over to the City University of New York's Baruch College, where he will become an associate professor of statistics and computer information systems at the Zicklin School of Business. In this new capacity, he will also direct the school's new state-ofthe-art electronic trading center-the Subotnick Financial Services Academic Center. Within that trading center, Weber, who has written extensively on systems, markets and economics and has consulted for Nasdaq, the London Stock Exchange, the Deutsche Borse and numerous financial services firms, hopes his students will comprehend how the flow of information and the modern high-speed tools of trading and settlement affect markets and the business of financial services. "The idea is to create an environment that is as close to a real live trading room as possible," he said. "We want students to hit the ground running wherever they go from here." The importance of technology in the trading process has spawned the creation of numerous simulated trading floors at universities across the country, including MIT, Bentley College, Carnegie-Mellon University, the Illinois Institute of Technology and the University of Texas. However, the Subotnick Center, which is slated to go live later this year, is being designed to create as comprehensive a trading environment as simulation will allow. The center will not only include about 40 workstations complete with live datafeeds, real-time quotes, analysis and computerized trading models, but it will also provide technology and computer simulations to handle everything from pretrade applications through execution, compliance, clearing and settlement. And as such, it will not only be a training ground for some, but also a laboratory to allow scholars to research everything from macro-economics to advanced trading strategies, fraud detection and risk management. But one thing that will not happen in the facility, Weber said, is actual trading. No one will trade for real, even for personal accounts-a perhaps, tempting idea given the cream of technology and market data on hand. "It won't happen for several reasons: It is not the purpose of the center, and I'm quite sure the vendors who supply the workstations at less than commercial rates would not appreciate that usage," he said. Although he'll be working in a simulated environment, Weber's response to the question of what actual systems will be installed at Baruch is as real as any answer you'd get from an IT executive at a Merrill Lynch or a Salomon Smith Barney. "We are talking with several key vendors," he said. "It would be premature to say anything more." One issue he doesn't entirely have to worry about is the move from T+3 settlement to T+1. "As far as our trades go, they are simulations, so in a sense we will be operating in T+0 from the start," he said. -Michael Forman

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