The RiskFactory trading room owned by the chair of mathematical finance is a unique educational establishment in Germany. This technologically state-of-the-art computer room is intensively used for advanced training within the framework of our Fit for TUMorrow initiative at the chair of financial mathematics. Thanks to the generous financial and inspirational support on the part of our industrial partners, tuition fees from the faculty of mathematics and direct allowances of the technical university, we can offer our students a hands-on insight in the world of financial markets in addition to their theoretical education.

The RiskFactory at the chair of financial mathematics provides for real-world seminars in equity trading, foreign exchange trading and option trading held by the internationally reputable and experienced external lecturer Dr. Michael Smith (University of Reading). In these seminars, students are made familiar with basic trading terms of different asset classes. In a real-time simulation environment students take on the role of a market maker and trade with computerized traders and each other. By doing so, the students learn to systematically quote bid-ask prices, react on market movements and news, control the risk of their trading books and keep their calm in the hustle and bustle of the markets. Apart from that, hands-on seminars are offered in the RiskFactory within the framework of the Fit for TUMorrow program.

The trading room is also frequently used for basic courses of the chair, such as Discrete Time Finance, Continuous Time Finance or Portfolio Analysis. In line with the basic training, a separate programming training is offered in which the techniques and applications of financial mathematics taught in the reading are applied (such as the numerical solving of PDEs, the assessment of American options in the Binomial Model or also Monte Carlo simulations). Not only does this program supplement and emphasize the hands-on training in financial mathematics at the Technische Universität München, but it is also an important tool for future financial mathematicians to use their gained knowledge in quant teams of banks, management consultancies or insurances later on.

The RiskFactory is equipped with state-of-the-art technology. Seventeen workstations with quick quad-core, dual-screen computers give students a clear overview of a trading simulation. The lecturers dispose of state-of-the-art computer-controlled boards, so-called “smart boards”, that provide for the greatest possible flexibility when working with boards or transparencies. A video network has been installed for optimum visibility also in the back rows. It directly sends video signals from the smart boards to the students’ dual screen workstations.

The RiskFactory computers are equipped with state-of-the-art training software for scientific work: Software for office applications (MS Office), scientific text processing (LaTeX) as well as mathematically and statistically oriented programming languages (MATLAB, R) are intensively used by the students within the framework of computer training and their final theses. Students get access to financial market data of the financial market provider Thomson Reuters to be able to test their theoretically gained knowledge on real data and learn how to use the Reuters 3000 Xtra software, which is frequently used by the financial industry.

Generally, the RiskFactory, which goes down very well with the students, is a really enriching institution at the Technische Universität München, as it innovatively combines state-of-the-art technology with tailor-made courses and a choice of financial market data.