Publication: Journal of Economic Education
Volume: Forthcoming
Issue: Forthcoming
Pages: Forthcoming
Author(s): Andrew McKenzie, Steven Nichols and James Smartt
Address (Principal Author):
Andrew McKenzie
Associate Professor
Department of Agricultural Economics and Agribusiness
University of Arkansas
217 Agriculture Building
Fayetteville, AR 72701
Fax Number: 479-927-1915
Office Phone: 479-575-5306
Email: mckenzie@uark.edu
Title: Basis Trader
URL: http://www.uark.edu/ua/btrader/
Descriptive Note:
The objectives of this website are to highlight the
educational importance of the concepts of grain merchandising, hedging and basis
trading, and to provide instructors with the necessary tools to teach these
concepts to undergraduate agricultural economics and agribusiness students. To
accomplish these goals interactive links are included that provide (a) a general
overview of grain merchandising, hedging and basis trading, (b) access to a
downloadable version of "Basis Trader" software game, and (c) a tutorial of how
to play the game. It is hoped that these materials will become valuable teaching
aids in the areas of commodity price risk management and marketing.
The current environment of increasing globalization in agricultural markets has
led to higher price volatility and greater usage of risk management tools.
However, there is a lack of undergraduate agribusiness course materials on basis
trading and risk management education at the merchandising level of the grain
industry, where most agricultural risk management activities occur and where
many employment opportunities for students are found. Existing risk management
course materials focus exclusively at the farm level. We seek to meet this need
by making available a basis trading software game, developed at the University
of Arkansas, to teach merchandising and price risk management skills to
undergraduate agribusiness students. "Basis Trader" is an engaging
risk-management game using computer technology to provide an experiential
learning experience that develops students' analytical decision making skills at
an applied level. Risk management and basis trading skills are applicable to any
markets where both derivatives and underlying cash instruments trade side by
side, and they are useful tools to acquire for a wide range of career paths.
Accepted Web Sites
Journal of Economic Education WWW Page