University of Michigan Business School
Finance 640 is a course about trading financial assets. The course is intended for MBA students that expect to take trading jobs, but it is also relevant for all students that expect to trade securities frequently. The course uses a combination of lectures and trading simulations/games conducted on the UMBS trading floor to make students comfortable with ideas like order type, bid-ask spread, information, and liquidity. Students that have taken the core should be prepared for this course.
Many of the materials used in F640 will be available on this page. You will need a password to follow a number of the links below. If you are a student in F640 and you forgot what the password is, or if you need access to my class notes for some other reason, call me for the password at (734) 763-4129. The course notes are in Adobe Acrobat (.pdf) format. To download a free copy of the Acrobat reader, visit Adobe's web site.
Items of interest to potential students
Items of interest to current students
(password protected)
- Course Notes
- Introduction Slides
- Trading Stories Slides
- Trading Industry Slides
- Orders and Order Properties Slides
- Market Structure Slides
- Order-Driven Market Mechanisms Slides
- Brokers Slides
- Informed Traders and Market Efficiency Slides
- Order Anticipators Slides
- Bluffing and Market Manipulation Slides
- Dealers Slides
- Bid/Ask Spreads Slides
- Study Helps
- Trading Case Instructions and Hints
- Trading Case B01
- Trading Case RE1
- Description of Nasdaq Head Trader Game
- Instructions for UpTick Law of One Price Trading Case (to be played on 1/22/04)
- Note on Interest Rates for UpTick LOP Trading Case
- Suggestions for Playing Trading Games
- Suggestions for Playing the Headtrader Game
- Trading Case RE2
- Trading Case RE5
- Instructions for UpTick Case on Market Efficiency
- Analysts Report for UpTick Case on Market Efficiency
- Instructions for Practicing UpTick Case on Market Efficiency
- Instructions for UpTick Case on Price Formation
- Analysts Report for UpTick Case on Price Formation
- Instructions for Practicing UpTick Case on Price Formation
- Additional Readings
- Article by Fisher Black - "Managing Traders"
- Economist Article about Inter-dealer Brokers Using Phones Over Computers
- WSJ Article about Tradescape
- WSJ Article about Paying for Order Flow
- Reuters Article about Island ECN going to Cincinnati Stock Exchange
- Kyle, A, 1985, ``Continuous Auctions and Insider Trading," Econometrica, 1315-1336.
- Information from Nasdaq
- Homework Assignments
- Homework 1 - due January 15
- Homework 2 - due January 22
- Homework 3 - due January 29
- Homework 4 - due February 5
- Homework 5 - due February 12
- Homework 6 - never due
- Homework Answers
Relevant Links
Tyler Shumway
Office: 6207 Business Administration
Phone: (734) 763-4129
Fax: (734) 936-0274
shumway@umich.edu
http://www-personal.umich.edu/~shumway/