Trading Theory for Practice

Last term, we filmed Gavin Brown from the Business School doing one of his Economics lectures. In these lectures, Gavin introduces various theories for stocks and shares prices and movements. However, keen that his students don’t just get a good book knowledge of his subject, he has introduced a way of applying their theory in practice. Here, Gavin expands on some of the points he discusses in his Good practice film, focusing particularly on ethics and research.

You have been using the free online platform ‘Bull Bearings’ as a teaching tool on your level 6 unit. There are ethical aspects with this, though, like gambling and the potential for students deciding to use real money. How do you deal with these ethical issues?

“Probably my biggest concern with this, and I talked it over with the leadership team in the Accounting, Finance and Economics department… fundamentally it is not gambling because this isn’t real money. It is just fictitious money, fictitious account, but based on real stocks and shares.  But there were two concerns. The first is that fundamentally, depending on your religious and philosophical values, someone could look at this and think ‘well, I understand that you don’t think it is gambling, Gavin, because it is not real money, but I’m not comfortable with that’. So, I have got the same assignment which can be used for anyone who takes that position. They don’t have to explain themselves to me, they can just do the assignment based on stock price movements, but they don’t have to talk about profits and losses and things like that. And that is good because it doesn’t put pressure on students to do this method of assessment. The second thing that I was also a bit concerned with was that even though this is a free platform, obviously it is free for a reason in that they have then got people advertising around the league itself to try and get you to buy things, in the same way that YouTube do and things like that. And, obviously because it is stocks and shares programme you have organisations that want you to register and trade stocks and shares with them. So, I have very, very strong caveats at the start of my lessons and all the way through the unit, telling students this is for educational purposes only, I do not condone any real gambling. Obviously, they are adults at the end of the day. They make their own decisions. But I am keen that they don’t take that step.”

What are the research implications of your teaching?

“There are research implications. We study risk and behavioural economics here in the department led by Richard Whittle. The results that we see from students actually buying and selling shares actually helps us to get an idea for their risk tolerances and their risk preferences, which is something that we can try to capture, model and monitor.  Students, in addition to the stocks and shares trading, also use a piece of software called Finametrica. What Finametrica does is it hits them with a series of questions and at the end it gives them a risk index score out of 100. And we have had students realise that they were more risk-averse than they thought, or risk-loving than they thought. But this often contextualises their trading behaviour. It allows them to realise ‘am I someone who seeks risk or otherwise?’.”

This post was contributed by Gavin Brown, Senior Lecturer in Accounting and Finance in the faculty of Business and Law at MMU.

See what students think of Gavin’s teaching here.

The Good Practice Exchange is an online resource created by CELT MMU to celebrate and share good practice in learning, teaching and assessment by our colleagues across the university. If you or your colleagues have a teaching initiative or aspect of good practice you think would be valuable to share, contact Eleanor Livermore on Thank you.

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