STRATEGIC PLAN FOR THE KOCH GLOBAL TRADING CENTER
DEPARTMENT OF FINANCE, REAL ESTATE, AND DECISION SCIENCES
WICHITA STATE UNIVERSITY
MARCH 2014
Background on the Koch Global Trading Center
The idea of a trading simulation room for the Barton School of Business was conceived in 2012.
At that time, Rick LeCompte, Chair of the FREDS department, and Angela Dudley of the WSU
Foundation began putting together a formal plan for the room and started visiting potential
donors. The initial fundraising goal of the trading room was set at $1 million.
After a year of fundraising, the naming gift pledge of approximately $350,000 was received in
the summer of 2013 from Koch Industries. At that time, Tim Craft was appointed as the
director of the trading center. The trading room was then officially named the Koch Global
Trading Center. Other large donors included Bob Young and Murfin Oil for $150,000 and Cargill
Meat Solutions, Inc. for $120,000. In February 2014, total pledges for the trading center
reached the goal of $1 million, with additional fundraising still continuing.
In order to make the trading center more responsive to the market, we created an advisory
board made up of local business leaders and representatives of the major donors. The board
had its first meeting on November 1, 2013 and the next meeting will be on May 16, 2014. At
that time, we discussed the future of the trading center. Several board members gave
suggestions not only on the physical layout of the trading center but also different curriculum
ideas.
Purpose of the Koch Global Trading Center
The Koch Global Trading Center (trading center) holds the promise of “transforming talent” by
using experiential learning. The trading center located in Clinton Hall will have 30-dual monitor
workspaces, 2 stock tickers and professional financial software. This distinctive space will give
finance and other business students a hands-on learning experience. While the room
resembles a computer lab, the trading center’s real competitive advantage lies in its technology
and software. These platforms open up opportunities for our students that weren’t available
before, and help position the Barton School as a leader in finance education.
In addition, the Koch Global Trading Center will be distinguished from trading rooms at other
universities by a special emphasis on commodity and energy trading. Through the help of
traders and other professionals at Koch Industries and related firms, we are developing new
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courses focusing specifically on these areas. These are courses that are not typically covered at
finance programs at other universities. One of the long-run goals of the FREDS department is
the creation of a concentration in commodity and energy trading within the finance major. This
new concentration will be another way for our graduates to distinguish themselves in the
market and enhance their employability.
Short-Run Goals of the Koch Global Trading Center (Spring and Summer 2014)
Over the next few months, the goals of the trading center are very specific: completion of the
trading center and opening for the first class, Investments 620, in July, 2014. All the work
between now and then is concentrated in two main areas: hardware and software.
On the hardware side, construction began on March 15, 2014 on remodeling Clinton Hall 206.
The contractor has a deadline of June 6, 2014. All of the video screens and tickers have been
selected and purchased from Rise Display. They will install all of their equipment after the
room construction is completed. All of the furniture for the room has been selected and
ordered from Encompass. All of the computers have been ordered using the WSU contract
with Dell. The remaining equipment for the room, such as the podium, speakers, security
cameras, etc., is being ordered with the help of the WSU Media Resource Center.
On the software side, most of this technology is either related to data access or to software. As
we expected, the cost of data is proving to be expensive. We have held extensive talks with
two of the largest data vendors, Bloomberg and Thomson Reuters. Both products, while very
extensive and used throughout the financial industry, would individually cost us about $60,000
each year. To help mitigate some of the costs, we have been working with the vendor reps at
Koch to try to find some less expensive alternatives. So far, we have previewed data systems
from Globalview and from ZE Data. Both companies specialize in commodity and energy data.
We are also considering S&P Capital IQ. The WSU Library already subscribes to part of Capital
IQ, S&P NetAdvantage, so we are exploring the costs of expanding the existing subscription to
include the price data we need for the trading center.
The software needed for the trading center is mainly for running the simulations the students
will use as part of the courses. One of these is Stock Trak, a portfolio simulation software
package that uses real market data. Another is X Trader, a trading simulation software. Trading
Technologies, the company that created this software has been very generous to other
university trading rooms by giving them free use of the software. We are working to set up a
similar deal for our trading center. Through the contacts at Koch, we signed a contract with
Allegro Software for free use of their data management software, valued at $2.2 million. This
software will be used mainly in the new commodity and energy trading class. In the future, we
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anticipate this same software will be very useful for our MIS database management courses.
Other typical computer software, such as MS Office, will be installed by UCATS.
Intermediate Goals (2014-2015 Academic Year)
With the completion of construction, the real work on the trading center will enter a new phase
focused on curriculum and management of the center. In the fall semester, 4 courses are
scheduled for the trading center: Investments 620, Fixed Income Securities 631, Financial
Modeling 450, and Advanced Managerial Finance 860. In conjunction with the center director,
the instructors will work to incorporate the capabilities of the center into these courses. It may
take a few semesters to fully appreciate and utilize all of the opportunities the trading center
affords these courses.
The center director will have to set up the day-to-day management of the trading center. This
will involve creating policies and procedures for using the center and the hiring and training of
student workers to run the center when it is open for students to use.
In Spring 2015, the new commodity and energy trading class will be taught for the first time
using an adjunct from Koch. Since the success of this class is paramount to the overall success
of the trading center, the director will be working very closely with the professionals at Koch
and related parties to develop and execute the course. Another new class that was created in
the reorganization of the MBA curriculum is the new Advanced Investments 865 course. It will
make extensive use of the data and software of the trading center. Also in the spring, the
Futures and Options 622 course will be taught in the trading center for the first time.
Long-run Goals (2015-2020)
After the first full year of using the trading center, we will need to reevaluate what we have
been doing in addition to extending the center's reach and impact. After the first year, seven
different courses (12 different sections) will have been taught in the trading center. We will
need to reevaluate how each course is using the center as well as determine if the databases
and software we are currently using are appropriate for what we are trying to accomplish.
As a result of the trading center and its advisory board, we are hoping to expand the internship
and coop opportunities available to our finance students. In particular, we hope our major
donors will supply some of these opportunities.
With the goal of starting a concentration in commodity and energy trading, we will have to
create more new courses in this area using the trading center. These courses would be
developed in consultation with the trading professionals at Koch as well as input from our
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advisory board. A concentration takes at least 9 hours so we will need to develop at least 3
courses altogether.
Continued fundraising for the trading center will be essential if we are to sustain the annual
data and software costs. As part of this commitment, we need to find donors willing to cover
the costs of a Bloomberg license for the trading center. The educational discounted cost is
$63,000 per year for 12 licenses or $24,000 per year for 1 license. Given the breadth of the
data coverage in Bloomberg as well as its almost universal usage in the financial industry, it
would be a great benefit to our students to have knowledge and practical use of this software
before graduating.
Another long-run goal of the trading center is the creation of a student managed investment
fund. This fund would obviously require a special donation separate from the endowment for
the trading center. However, the opportunity for our students to manage real money would be
a great learning experience and addition to their resume.
One final goal for the trading center is preparing for the day when a new business school
building is built. We should reevaluate the size, layout, technology, etc. of the existing center
to see what is working and what could be improved in a new facility with a trading center
designed from scratch.
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Goals of the Barton School of Business that the Koch Global Trading Center can help meet
GOAL #1: To provide an applied learning or research experience that increases employability
for every Barton School student by August 2016.
Objective 1. Undergraduate financial project using the trading center technology.
Every finance major is now required to take FIN 620, Investments, after a recent
revision of our curriculum. In this course, we will devise a project where each
student selects and monitors an investment portfolio that they create, manage
and evaluate using real market data. This would be the responsibility of the
course instructor in conjunction with the trading center director and department
chair.
Objective 2. Graduate financial project using the trading center technology.
Every MBA student with a concentration in finance is required to take FIN 865,
Advanced Investments. In this course, we will devise a project where each
student selects, manages and monitors an investment portfolio they create using
real market data. This would be the responsibility of the course instructor in
conjunction with the trading center director and department chair.
Objective 3. Database management project using the trading center technology.
Future MIS courses in business analytics will devise a project where each student
creates database models using real market data. This would be the
responsibility of the MIS course instructor in conjunction with the trading center
director and department chair.
Objective 4. Internships or Coops based on the training received in the trading center.
As a result of the trading center and its advisory board, we are hoping to expand
the internship and coop opportunities available to our finance and MIS majors.
In particular, we hope our major donors will supply some of these opportunities.
This would be the responsibility of the internship/coop office in conjunction with
the trading center director.
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GOAL #4: To increase Barton School research by twenty percent by December 2019.
Objective 1. Increase faculty research using the special data available in the trading
center.
The trading center has access to data that WSU currently does not have. This
could help expand the research for faculty in finance, accounting, and
economics. This would be the responsibility of the faculty in those areas. The
trading center will also have access to a proprietary software system, Allegro,
which can be used to expand research opportunities for our MIS faculty
Objective 2. Increase student research using the special data available in the trading
center.
The trading center has access to data and software that WSU currently does not
have. In addition, students will be working on individual projects that would not
have been possible to do before having the trading center. This could help
expand the amount of student research. This would be the responsibility of the
faculty and their students.
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