FEC
FINANCIAL ENGINEERING CLUB
WHAT IS FINANCIAL ENGINEERING?
 Multidisciplinary field applying mathematics,
engineering methods, and programming techniques to
financial theory.
 Traditionally, mathematical modelling of financial phenomena that is
implemented via some programming language.
 Nowadays, can refer to any application of technical tools to finance.
 Traders
 Quants
 Software Developers
MEAN REVERSION
 Idea – If two securities are co-integrated and they diverge in price, they should eventually
converge to their normal ratio.
 Mean Reversion strategies capitalize on this idea by buying the underpriced security and
shorting (selling) the overprice security.
 We assume that the overprice security will fall in price and/or the underprice security will
rise in price.
 When this happens, liquidate your position.
 $$$
 The strategy is market neutral, such that the trend of the overall market will not result in
huge losses or gains.
MEAN REVERSION
ABOUT THE FEC
ABOUT THE FEC
 We are a society of students interested in quantitative trading.
 We come from a variety of challenging majors that include
undergraduate and graduate students.
 We have worked at / have contacts at banks, trading firms, hedge
funds, and technology firms.
FALL SEMESTER PLANS
Interview
Preparation
Educational
Lectures
Strategy
Demonstrations
Software
Workshops
Talks from
Experienced
Individuals
Open-Source
Projects and
Resources
INTERVIEW PREPARATION
 Prepare for technical interviews through workshops and mock trading sessions.
 What is the probability that if you role two six-sided dice, their product is a perfect
square?
 2/9
 What is the expected value of the product of number of heads and tails of ten
randomly flipped coins.
 22.5
EDUCATIONAL LECTURES AND
WORKSHOPS
 Learn the material of restricted upper level finance courses.
 Lectures given by our members or posted online for your reference.
 Workshops on strategies to teach you how to trade by yourself!
 Hands-on workshops on software tools and trading platforms.
OPPORTUNITIES TO GET INVOLVED
Projects
• Develop valuable
programming
experience!
• Research projects
• https://github.com/FEC-UIUC/
Education Committee
• Help create lectures on
academic and industrial
topics.
Information Committee
• Help maintain the FEC
news blog.
EDUCATION COMMITTEE
Master students
• Create and present lectures
• Great opportunity to improve
presentation and communication
skills
Undergraduate students
• Create online education materials
• Work with master students with
lecture preparation
• Have basic knowledge in finance or
programming
Check email for application!
PROJECTS
 The FEC will source project ideas, provide templates for, and lead teams on
projects:
 Examples:
 Develop an automated trading strategy
 Build a poker playing bot.
 Develop a trading platform.
 https://github.com/FEC-UIUC
RESEARCH OPPORTUNITY
Form a Group
• Several topics to choose from.
• Utilize the knowledge in quantitative
trading to lead undergrad students
to explore.
Create Your Own Project
• FEC will provide you a platform to
share your idea for potential
projects!
INFORMATION COMMITTEE
 See financial applications in the real world
 Weekly newsletter/blog on finance related news articles
 Inform members of campus events
 Talks, presentations, recruiting
 Present current event topics
 Give short talks on relevant material, i.e. HFT
 Website managment and development
Check email for application!
TRADING COMPETITIONS
 MIT Fall Intercollegiate Trading Competition—Nov 2014 (sign-ups open!)
 Rottman Trading Competition – Spring 2015
 U-Chicago Midwest Algo-Trading Competition – Spring 2015
DUE PAYING MEMBERSHIP BENEFITS
Access to tick level
market data and level 1
quotes (bid/ask)
• Over 1000 US Equities of the
last 50 days and counting:
Field Trips
Eligible for executive
board and committee
positions
Resume Book
UPCOMING EVENTS
Trading 101
• Finance and trading fundamentals
• Options
• Market Structure
Interview Question
Jeopardy
• Prepare for interviews in a
competitive setting!
THANK YOU!
 Website: http://www.fec.ec.Illinois.edu/
 Facebook: http://www.facebook.com/UIUCFEC
 LinkedIn: http://www.linkedin.com/financialengineeringclub
 Email: uiuc.fec@gmail.com
Trading 101
Interview Question
Jeopardy