JessX

Encyclopedia : J : JE : JES : JessX

JessX is open-source software whose goal is to simulate the functionning of financial markets, as Experimental Finance does. It is an acronym for Java experimental simulated stock eXchange. It allows a number of traders to trade on a virtual market place, similar to Euronext, NYSE... The players are allowed to sell and purchase various types of financial assets, such as equities, bonds, currencies, commodities, etc. Presently, several types of orders can be passed on this platform, for instance limit orders or market orders. It is a simulation software for researchers in experimental finance. It can be downloaded freely [link].

Contents

1 A summary of JessX features

1.1 Basic functions
1.2 Advanced reasearch
1.3 Other uses for jessX

2 The developers team
3 Features

3.1 Upcoming features

4 See also
5 External links

A summary of JessX features

Basic functions

JessX basically allows the simulation of a market on which traders can pass Buy or Sell orders.

Its first feature is completedness - it is designed as an end-to-end experimental tool : from defining market properties, to running the market over a computer network, on to numerical and graphical analysis of the session for research purposes everything is included in the JessX software package.
Everything has been done to insure it is as simple to use as possible: No installation is required, and provided a recent version of Java virtual machine is available any operating system is supported. As the "traders" participating in experiments have to learn the use of the system within minutes, a lot of attention has also been given to ergonomy of the client side.
Finally, a quickstart guide allows for the testing of the program on your personal computer within minutes: clear instructions, preset market settings and even a robot trader if you feel alone on the market.

Advanced reasearch

JessX also offers many more functions than other experimental finance software (like ESDLA ..) does not offer.

Information asymmetry can be reproduced, as different actors can be provided with different qualitative or quantitative information (on a programmend timeset or on the fly).
Arbitrage mechanisms can be implemented, as the same assets can be traded on different markets
A wide variety of Market microstructures are available for testing : three order types (limit order, market order and best limit order), fixed and variable transaction costs on different marketplaces, different traders portofolio and abilities (availables order types, cancelling pending orders, orderbook visibility depth...) and of course variable trading sessions lengths and continuity.

Other uses for jessX

JessX is regularly used in education in order to give students a living experience of what a market is. From college to MBA, different teaching goals can be set:

giving a basic experience of what buying and selling on a market means to college students
explaining asset pricing on a "Finance 101" course to university freshmen
having a very advanced market experience with a variety of assets and insider trading situations to MBA students.

In the near future, using JessX for fun by organising trading competitions in closed settings or on the Internet will also be possible.

Finally, JessX includes an analysis tools, with arrays and graphs allowing for the debriefing and the assessment of trader's performance. During and after the simulations, JessX can also export the data provided by the experiments, so that it will be easily processed in a spreadsheet (like Gnumeric, or Openoffice Calc). Researchers as well as teachers can easily conduct a quantitative or qualitative research by using these powerful tools.

The developers team

Though the software is open source and developers all over the world can improve JessX, the project was initiated at Ecole Centrale de Lille and carried out by student teams working two-years projects.

The initial developping team (aka EcoXP05) initiated the project in September 2003 and has delivered alpha version "ecoxp-0.2" on SourceForge in may 2005. Afterwards, three additional month of developping were carried out by Thierry Curtil, from the same team. The second developpers team (aka Trading06) delivered a stable and multi-featured version "JessX 1.0" May 2006. A new team (aka Market07) has now taken over the software and website to develop operability of JessX over the internet in an attempt to develop larger-scale experiments.

All these projects have mainly been tutored by 2 french professors : Rémi Bachelet[link] from Ecole Centrale de Lille and, Olivier Brandouy[link], who is a researcher in experimental finance at CLAREE lab, Lille, France.

Features

Graphical analysis (end of experiment)

At the end of the experiment, graphical analysis can be done and saved.

Multiple financial products

Different financial products can be exchanged at the same time on the market. Assets are all named "stocks" but their characteristics (return and risk) can be customized (mean revenue and standard deviation of revenue).

Graphical "on-the-fly" followup

Each participant can view a chart summarizing the prices of the last deals executed. This chart is modified in real-time.

Configurable stocks

Multiple stocks can be exchanged on the market, and each one can be configured by setting the dividends given at the end of each session.

XML logging

Every event happening on the market is logged, and can be analysed later.

Asymmetrical information

The person in charge of the experiment is able to give pieces of information to some participants only, in order to study the effects of asymmetrical information.

Upcoming features

Futures, options... and other derivative products

These second or third generation assets are not available in JessX, but they can be implemented as the program is open source and has been designed in modules.

Better internet compatibility

To manage a large number of traders. Right now the limit seems to be around 200 actors in a given session, but it has not been thorougly tested.

Other orders type

Including stop order, market-if-touched order, etc.

.csv exportation

It permits loading the logs in a common spreadsheet.

trader agents

The current version of JessX allows mixing of human and computer traders. However the automatic trader in the 1.0 package (JessX-agent) does not follow any typical trading strategy and is just there for the testing.

External links

[JessX official site] (JessX Client, Server and Analyzer download, tutorials, ready-to-use configurations ...)
[JessX SourceForge page]
[Olivier Brandouy's Experimental finance Page]

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