FTS Financial Trading Simulations

FTS Interactive Markets:
Trading Simulations with Price Discovery

FTS Real Time System:
Advanced Stock Trading Simulation



Request a Demo: contact us at ftsweb@gmail.com

Explore FTS: from the menu's above or from these printable documents
Interactive Markets

FTS Interactive Markets

Some things can only be experienced. One of these is a live trading floor, where orders are submitted, prices are negotiated, activity is fast paced and competitive, and everyone reacts in real time to the actions of others. The FTS Interactive Markets with price discovery create this experience in an educational setting.
How it works
  • What is traded is specified in a trading case
  • The instructor selects the case and starts the market (the markets are easy to run)
  • Student’s trade with each other in a competitive market: they submit bids and asks, buy and sell orders. Trade execution is instant, and after each trading period (of a few minutes), everyone gets immediate feedback on their performance.
  • The trading cases have clear learning objectives
  • The simulation is repeated a few times to give the markets time to converge and for the learning to become apparent
What they learn
  • They experience what it is like to be a trader, how a market really works.
  • They get an intuitive understanding of the price discovery process, market efficiency, market impact, liquidity, and many other practical aspects of a financial exchange.
  • They get a strong understanding of financial instruments; the cases cover a broad range of instruments, including stocks, bonds, options, forwards, futures, swaps, currencies
  • It has proven to be one of the best ways to teach time value of money, market efficiency, option pricing, and forwards and futures.
The Cloud Based System
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Runs on any device

  • Instructors can start and run a market from any device, including smart phones
  • Students can connect from any smart device as well
  • Eliminates the need for a computer-equipped classroom or a trading room
  • Ideal for online and hybrid courses
  • Try it out: click here and in the new window, click "Connect to Demo"
The Windows System
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Advanced Capabilities
Learn More

Overview

How To

Features
Interactive Markets

FTS Real Time System

The FTS Real Time System differs from other virtual portfolio simulations in one fundamental way: it focuses on the application of analytical techniques in portfolio management. It comes with a teaching guide and detailed projects and exercises that help reinforce the understanding and practical application of concepts.
How it works
  • What is traded is specified in a trading case and project
  • The instructor requests the case and we set up student accounts
  • Students are evaluated based on the objectives of the trading project
What they learn
  • How to use analytical techniques in portfolio management and trading
  • Advanced features include learning how to manage portfolios and developing trading strategies in Excel and/or Python
The Cloud Based System
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Runs on any device

  • Trade from anywhere at any time on any smart device
  • Built in analytical support
  • Performance reports
The Windows System
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Advanced Capabilities
Learn More

Overview

How To

Features
FSA Module
The Financial Statement Analysis Module, teaching guide, and accompanying videos, have been developed with the view that this is one subject where a hands-on, learning-by-doing approach adds immense value.  
How it works
Students work with actual company filings, in a highly interactive and structured learning environment, with immediate and detailed instructions at every step.
What they learn
As students extract information and construct ratios, they absorb important practical details along the way, for example how different companies report information, how to map this information into the ratios, and as they gain experience, they develop the judgment needed to interpret the measures.
Explore the Financial Statement Analysis Module

Overview

Videos
FSA Module
The FTS Machine Learning Module provides a gentle introduction to the a variety of machine learning models and their applications in finance. The module uses a simple stock forecasting problem using easily available and easily understood data.
The Machine Learning module can be accessed through the FTS System Manager (select Installation above)
Interactive Markets
The FTS Modules are stand alone learning tools that allow students to build conceptual and analytics depth. Some modules are tutorial in nature, others let them analyze real world problems with real world data. For example, they can conduct financial statement analysis from first principles, learn to apply different valuation models, study efficient frontiers, learn option trading strategies and hedging. The modules complement our trading systems.
Efficient Portfolio Module
  • Statistical properties of stock and portfolio returns
  • Calculation and plotting of the efficient frontier with and without short sales from historical data
  • Instructions
Interest Rate Risk Module
  • Plot historical yields, spot rates, and forward rates
  • Animate curves to get a visual feel for long terms trends and mean reversion
  • Calculate volatilities and correlations
  • Conduct principal component analysis
  • Backtest to understand the efficacy of different immunization strategies
  • Instructions
Option Payoffs Module
  • Introductory module for teaching option payoffs
  • Understand the difference between profit and payoff diagrams
  • Plot common strategies
  • You can import your own data
  • Instructions
Binomial Tree Module
  • Introductory module for teaching the binomial model of option pricing
  • Understand the difference between American and European options
  • Understand how the tree is calibrated to a volatility estimate
  • Compare the price of the underlying asset to the value of the option along different paths
  • Instructions
Other Modules
  • Treasury Calculator
    • Understand the relationship between quoted Treasury prices and yields
    • Learn about yield curve approximations and interpolation
    • understand duration and convexity
    • Instructions
  • BDT (Black-Derman-Toy) Module
    • Calibrate a BDT model to your own yield curve data using either yield volatilities or local volatilities
    • Transfer the calculated lattice to Excel to price interest rate derivatives
    • Instructions
  • Limit of Binomial Module
    • Examine the nature of the convergence of the binomial and trinomial models to the Black-Scholes model
    • Instructions
  • Exotic Options
    • Using binomial trees, understand the payoffs and valuation of various exotic options
    • Instructions
  • Option Calculator
    • Calculate the values, implied volatilities, and hedge parameters for options
    • Binomial and trinomial models for American options
    • Link to Excel to calculate these for a large set of options
    • Instructions
  • Bond Immunization Lesson
    • A self contained interactive lesson for understanding how immunization works
    • Instructions
  • Principal Components Lesson
    • Understand the essence of principal component analysis with a visual calculator
    • Instructions
Learn More
Experimental Research
 FTS has its origins in research. It was originally designed by Professors John O’Brien and Sanjay Srivastava, and the first research paper using FTS came out in the  Journal of Finance in 1991 Since then, it has been used in a variety of studies, particularly for financial market experiments, and a list of some papers written on or using FTS is below. If you know of a paper that is not on the list, we would greatly appreciate it if you would send us the link.

Market Experiments The FTS Interactive Markets provide an easy to use and comprehensive framework for financial market experiments. It is quite straightforward to conduct experiments on information aggregation, speculative bubbles and overreaction to information, excess volatility and trading, and so on. The system also allows for different microstructures (call markets and continuous double auctions, quote and order driven markets), as well as very general payoff structures, allowing for a wide range of incentives to be implemented in an experimental setting. The entire experiment is defined in a spreadsheet. The easiest way to see its capabilities is to look at our existing cases (for example, case RE2, used in the 1991 Journal of Finance article). Then, look at the spreadsheet that defines the case. The workbook containing case RE2 is available at this link. A description of the various parts of the spreadsheet is given here. If you want to conduct market experiments, please contact us, and we can help you set up your experiment.

The FTS Experimental System Beyond markets, we also provide a “generic” experimental system, where you can run almost any experiment you like, including auctions, game theory experiments, behavioral finance experiments, and so on. More information is in this   document.

Some Papers Written Using FTS
About FTS

Installation

Windows Users

Mac Users

Smart Phone and Tablet Users

About FTS
FAQ

About FTS

The Financial Trading System was created by OS Financial Trading System.  Founded in 1992, FTS, as we are commonly known, is a leading provider of trading simulation software and other educational software.  
It was founded by Professors John O’Brien and Sanjay Srivastava.
John O’Brien (PhD University of Minnesota 1985) is Associate Professor of Accounting and Experimental Economics at Carnegie Mellon University and Associate Dean at Carnegie Mellon University-Qatar
Sanjay Srivastava (PhD MIT 1982) was a Professor of Economics and Finance at Carnegie Mellon University. He is now Associate Dean at the Robinson College of Business at Georgia State University.
FTS powered the first educational trading room, the “FAST Lab” at Carnegie Mellon University in the early 1990’s,the first educational trading room at a business school. The Smithsonian Institution's Archive of American History made the progressive work of the FAST Lab part of its permanent research collection on innovative information technology and awarded it a Computerworld-Smithsonian medal.

Why Choose FTS

Three questions:
  • Do you want a trading simulation with price discovery as well as a virtual portfolio simulation system and supporting analytical modules?
  • Do you want students to learn how analytics and quantitative techniques are applied in portfolio management?
  • Do you want a system where advanced students can develop trading stratgies, including introducing them to use open source Python libraries?
If any answer is yes, FTS is your only choice.

What does FTS Include

  • An interactive trading system ( FTS Interactive Markets ) with price discovery that creates a live dealing room where students trade with each other and lets them experience the dynamics of a trading floor, where orders are submitted, prices are negotiated, activity is fast paced and competitive, and everyone reacts in real time to the actions of others
  • A virtual portfolio management system ( FTS Real Time System ), where students manage positions of real world securities at real time prices from financial markets where the emphasis in on the use of analytical tools to guide decision making
  • Various modules that allow students to dig more deeply into practice , such as our Financial Statement Analysis Module
  • A research system that lets you conduct experimental research on markets, behavioral finance, game theory, and many other areas

How does it differ from other systems 

  • Our Approach
    • The central difference between FTS and other systems is that we focus on building the analytical and modeling skills of students in practical settings
    • Our teaching guides and projects are uniquely designed to build these skills
    • The simulations reinforce, extend, and provide practical applications of concepts that are taught, and have a high pedagogic value
  • Analytics
    • Analytics and algorithms dominate today’s financial markets, unlike the markets of twenty years ago. Both our trading simulations let students learn to develop and test trading algorithms in a live setting . This is completely different from back - testing on historical data . It also makes it possible to implement trading strategies that would be almost impossible to do manually (e.g. pairs trading, market - neutral strategies, basket trading, and optimal trade execution).
  • Support
    • Whether you want to create your own trading case, want to run an experiment, or want to discuss how best to implement any part of FTS into your curriculum, you get support directly from professors who have taught using the system at a variety of levels.
    • Technical support is available 24/7
    • Student support is available by email at ftsstudent@gmail.com
  • Scalable
    • Students to install the system on their own computers and access it from anywhere on the internet. Given the scalability of our system, large numbers of students can participate, develop analytic depth and build practical skills.
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