Wharton's OTIS is a tool for teaching students a set of financial management skills. The application underscores
several key concepts taught throughout the course:
Portfolio balance and diversification — How portfolios are constructed
and how to keep them balanced given the vagaries of the market.
Benchmarking — Many funds are built and measured against a standard, allowing investors
to see how the fund is doing in comparative terms. Fund managers strive to show better performance
than the benchmark; students running OTIS seek to outperform the S&P 500.
Liquidity — The mechanics of constructing the desired type of portfolio,
strategies for entering and exiting the market, and the need for cash on hand.
Pricing — Funds have the potential to move the market with their buys and sells;
students must learn how dramatic changes in the composition of their funds may affect the market as a whole.
Sector Analysis — Creating industry sectors and assessing the relative
returns of securities within and across sectors.
Short Selling — Learning how to use various types of trading orders, including short selling and stop limits,
to profit from market declines as well as increases.
Margin Trading — Understanding the mechanics, risks, and requirements of margin trading.
