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Kids Rock The Market: Magnetar’s Trading Challenge Brings Financial Education To High Schools

When you enter Chicago’s Navy Pier Grand Ballroom for the Magnetar Team Challenge, something feels right – about education, about learning, about our kids and our future.

Inside the beautiful and towering landmark space, 34 high schools brought 48 teams and more than 400 students to compete for the best high school trading team in the Chicagoland area. Each team of five to seven students huddled around computer screens at each table to plan and execute a trading strategy on an undefined previous trading period using $100,000 in a simulated stock portfolio. Each team was supported by teachers plus more than 50 volunteer coaches from the financial industry to help kids navigate economic fundamentals, volatility and market trends. Over the next several hours, a winner would emerge.

That was the backdrop on Saturday.

But what is more telling of just how hungry students and schools are to learn and deliver the basics of personal finance – from credit and debt, saving and spending, to student loans, risk management, insurance and investing – is the number of students that have taken the curriculum since Magnetar Academy was launched seven years ago by Magnetar Capital, based in Evanston, IL. So far, more than 14,400 students from 115 schools have participated in the Magnetar Academy program in Chicago and its suburbs with 180-plus area teachers trained in providing the curriculum. The team challenges have attracted more than 1,250 students. Saturday’s event was its sixth competition and the largest to date.

Alec Litowitz, founder and CEO of Magnetar Capital (pictured above), said the program and the team challenge are part of a goal the firm set from the beginning: give kids the tools they need for some of the most important aspects of their lives.

“There are two things that are unavoidable in our lives today, technology and finance,” Litowitz said. “We want every single high school student to learn about this. This is our life curriculum.”

In July 2016, the firm partnered with the University of Chicago, with a goal to roll out Magnetar Academy’s 30-  to 40-hour curriculum across the country. It dipped its toe outside Chicago for the first time this school year with a high school in New York City, but organizers say there is still room for growth and tweaking in Chicagoland before a taking on a larger push nationally.

What is interesting and inspiring about the team challenge event is that it makes the markets very tangible. That seems odd to say in today’s super high speed digital stock and derivatives markets. But each team had a trading screen, a portfolio of stocks to enter or exit the market, pie charts based on market caps, economic indicators and price charts showing historical trends. The markets were very visible to them. Betsy Sumner, a teacher at Wolcott School in Chicago, said the curriculum takes students on an informative journey that literally starts at square one.

“We started the year with kids not knowing what a stock was,” said Sumner, who is now in her fourth year teaching the curriculum. “Now we’re focusing on stock portfolios, talking about diversifying portfolios, looking at economic indicators and other industries. No matter what they do in life, they need to know about the stock market.”

Futures industry veteran Sean Smith volunteered to coach one of the two Wolcott teams on Saturday.

“To have this type of introduction to the markets is absolutely critical,” he said. “And students learn that you should not be afraid of the markets or trading.”

Another industry executive Tony Saliba, CEO of MatrixEX, served as a volunteer coach for Garcia High School. He said “the financial literacy these students are learning should be part of every public school’s offering.”

The six hour event, which featured a financial literacy quiz for extra investment bucks and the trading competition was won by Northside Prep. Second went to Deerfield High School and third to Lincoln Park High School. The financial literacy quiz winner was Whitney Young Magnet High School.

All of this is still thought of as a start on the long road to financial literacy across the United States. A 2016 survey by Bankrate.com found that just four out of 10 Americans, and just one in three Millennials own stocks. Some of that is attributed to younger generations often not investing until later in life. But with programs like Magnetar’s, that trend could change in the coming years, perhaps with a teenager’s first trading challenge.

 

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Kharouf is a Chicago-based freelance reporter and editor who was previously CEO and editor-in-chief of John Lothian News.