On Wednesday, the CME Group announced the launch of a new education initiative, the Futures Institute, an online platform for education on futures and options on futures. It offers live instruction, trading simulation, interactive training modules, and market research. JLN spoke with Mark Omens, senior director and head of retail sales for CME Group, to find out what stands out about the new program and who can benefit.
The web site can be found at https://www.myfuturesinstitute.com/
Q: There are other educational web sites out there for the futures industry. What is innovative and unique about this one?
A: What makes this web site different is that we’re trying to integrate learning about the product by actually applying this information to trading in a simulated environment. We take subject matter that may be confusing for someone who is new to the futures world, and break it up into bite size moments so the individual can integrate them into the marketplace while practicing trading those markets. For example, if you are trading equities today, they all trade in penny increments and don’t have expiration dates, but in the world of futures each contract has a different notional value, a different tick size and expiration date, and the margin works differently. We break those up into sections so individuals can learn about them at their own pace. Also, we have integrated features into the simulator that give out learning moments.
Q: What is a “learning moment”?
A: For example, individuals can develop their own Trade Plan – they fill out questions such as how much of their account balance they want to risk on a given trade, and if they buy a quantity that exceeds that level, they will get an alert telling them they have surpassed the parameters they set. We then send them a learning module on risk management. So the idea is to learn while you trade instead of just reading a textbook. We try to make it very actionable.
Q: Who is your audience and what are you doing to attract them?
A: Our audience is the active, sophisticated online trader: individuals trading on their own behalf and making their own decisions. To classify someone as an active individual trader, we look at the basic industry standard, which most independent studies confirm, which is an individual that trades 10 or more times a month.
So our audience can be either those who have never traded futures or who have only traded a little. And this site is there for anyone who wants to get educated on futures. Our efforts as far as outreach have always been focused on this subset of the retail world. And from having educated many of those individuals, we have learned some of the barriers to learning.
Q: What is the difference between the new Futures Institute and your existing Futures Fundamentals website?
A: Futures Fundamentals explains the role futures play in everyday life. The Futures Institute is focused on taking individuals that are trading the markets or are interested in trading the markets, and trying to provide them with the proper knowledge of the futures markets and the resources to enhance their trading skills.
Q: Are all the examples of products the web site uses from the CME Group?
A: Yes, they are all products traded at CME Group.
Q: Can you briefly describe a few other features of the Futures Institute site and how they work?
A: We have a market section where we break it down by asset class. Each section has a combination of media explaining the asset class: videos; white papers; trading strategy; daily market news; contract specs and all the things you need to know about the product. Those who use the web site can explore 36 of the most actively traded products at CME Group.
Another thing we are excited about is that every month there is one week where we host the Futures Challenge simulated trading competition, where traders can compete against their peers for cash prizes. They first take a quick quiz of about 17 questions, which gives them an understanding of the key characteristics of futures contracts, such as expirations, trading in a centralized order book, etc.
We also have learning modules that are short and easy to read, covering subjects like risk management, technical analysis, trading plans, and the various types of market participants. Lots of people offer trading competitions, but our goal is for people to come out more educated and more knowledgeable on futures than when they started.
Q: Who will the instructors be?
A: All individuals educating for the institute will be internal CME employees. They will be individuals who have actually traded the markets themselves. We want to differentiate ourselves on that front also. All our educational content at the Futures Institute will be written by people who have traded our markets. The About Us section will eventually have the bios of all educators for the institute.
Q: Can you say which partnerships you have for this initiative?
A: We don’t want to name specific firms at this time, but we work with the retail brokerage community to help educate their internal staff and their customers and prospects about futures.
Q: What is your goal and how will you achieve it?
A: The Futures Institute will be part of all our efforts on retail trader education. Our goal is to make every individual trader around the globe aware of this site where they can go to get educated about futures.