Mastering Futures Markets: Classroom Game Revolutionizes Understanding of Trading
The article presents a classroom exercise called the "ZIP Code" trading game to help students understand futures market trading. The simulation allows students to trade on an electronic market exchange, learning about opening and closing positions, calculating gains and losses, daily settlement processes, futures-spot price convergence, arbitrage, speculation, market efficiency, and insider trading. The researchers conducted the experiment with a large group of finance students and found positive results in enhancing their understanding of futures market concepts.