Leuk dierA bright day for the Dutch football this weekend during the annual Financial Football Tournament. After Eurex (2013) and EEX (2012) it was finally online broker Lynx keeping the title in The Netherlands for a year.

As usual, the final was a close call. The game between Eurex Frankfurt and Lynx was undecided after regular time.

A penalty series was required, and after seven (!) penalties Lynx won the cup. Unsure if Karel Mercx was allowed to take a penalty. Congrats to Lynx and thanks to Bennington for organizing the event.





Duur, maar wel tennis kijkenIn the nineties, the trading in futures on the Bund was mainly concentrated in London open outcry pit of LIFFE. Suddenly, the Deutsche Terminbörse appeared with an electronic trading platform and almost overnight captured all market share in the bundfutures mid 1997. When this happened, Willem Meijer was in the fixed income business. 

Now Meijer is leading TOM, and starting next week may be a similar case of a major shift in market share. ABN AMRO will start routing all their option order flow to TOM (link, nl). Well I’m unsure of the size of ABN’s option trading flow – but this could really tilt the market in favor of TOM.

Market makers don’t really want to be active in a market where they solely trade against other market makers. Spreads could widen on Euronext, and tighten on TOM to trade against the retail investors. On the other hand, not much effort to send the same quotes to different markets.

Of course, there’s no such thing as passing through the benefits of a cheaper exchange to customers. Better execution on TOM is a fairy tale, the same market makers are sending the same prices, and markets are pretty tight – not much room for tighter margins.

Bad news for Euronext, that’s for sure. It’s a curious coincidence the options on Euronext will start trading next week, and the only interested market maker ready to provide liquidity is once again SIG (Susquehanna).

  • News from the big board, IMC is getting a lot of airtime these days as Rob and Wiet bought the Goldman specialist pit, and the take over is getting reality. Link.
  • This weekend the next edition of Financial Football will be held in Abcoude. Link.




Droste effect op de beursA kind of meta story. The stock Euronext has been listed on the exchange Euronext for a few weeks now. On August 28th there will be options introduced on the stocks Euronext, on the Euronext derivative market. (AN14-011)

Euronext options (code : ENX) will be a part of the new “spotlight” segment. Currently there are six spotlight option classes : Telegraaf, Altice, BESI, Accell, Sligro and Exact. Rebates, profit sharing and promotional actions with brokers ; only one market maker is interested in quoting these options. Susquehanna (SIG) quotes everything.

Euronext seems to forget they need the liquidity providers. Without market makers there’s no market. Check the options on Kas Bank (no, they don’t exist). Even SIG wasn’t interested to make a market in Kas Bank options (Euronext Notice AN14-007).

No OCI options at Binck

These days Euronext is depending on brokers willing to allow their customers to trade in new products. Remember the Egyptian options from OCI? This stock is a constituent of the AEX index. TOM doesn’t consider the options on OCI very interesting. No OCI options on TOM.

Fair enough, but this means clients of Binck/Alex are blocked altogether from trading OCI options. I’ve checked with Binck why I can’t trade OCI options with them.

There’s not much demand for OCI options, and they are too expensive for us.

Guess they weren’t referring to the implied volatilities in OCI. Binck and Alex make more profit executing retail trades on TOM than Euronext. Retail investors with Binck/Alex can only trade options available on TOM.

Trolling Euronext

TOM could troll Euronext to the max by not copying the Euronext options to their market. This way the majority of the Dutch investors would be cut off from trading Euronext options (because Binck and Alex can’t trade directly on Euronext derivatives anymore). Binck isn’t interested in retail investors, so they wouldn’t object.

Imagine Euronext suing TOM for not having Euronext options. Would be interesting.





SuperdoeiSurprising news last Friday. Cees Vermaas suddenly announced to leave Euronext – with immediate effect. The CEO of Euronext Amsterdam didn’t give a reason for his departure, nor did the exchange. In general, a reason to be suspicious. Apparently the man is moving to competitor CME – as the new head of the European branch.  C

The landscape of exchanges in Europe is getting increasingly fragmented with a dozen of exchanges chasing a part of the pie. However, Chicago Mercantile Exchange isn’t one of them. A powerhouse in the USA, it has no presence in Europe yet. Just opened their doors in London, and are aiming for forex products mostly.

French take over Euronext

Question remains, why would a member of the board of an established exchange jump ship? Checked a few sources. Off the record, people confirmed the French are taking over Euronext. Nobody of the Dutch former senior management has been able to get a position in the group. Everybody reports to Paris. Political games played all over the place, and no feeling with the Dutch market.

The Dutch HR director is forced out, the Dutch retail team will be liquidated. Well, sources can understand “Cees didn’t enjoy working there anymore“. Add a job offer by the boys from Chicago and well negotiated exit terms in his contract : done.





Nee, dit is niks jongensIt’s going downhill at Euronext. In a press release, the exchange announced to introduce weekly index futures in the fourth quarter of this year. That’s the most silly idea I’ve heard in a while.

In the AEX, there have been weekly options for a long time. A big succes, decent volumes (although most of it at TOM). Market makers usually have to juggle a bit with their delta exposure. Hedging delta’s with monthly futures has a maturity mismatch. These market makers could use weekly futures.

The problem is – they are the only ones. Every sane investor or trader will head for the most liquid future, which is always the front month. Apart from some dividend impact, there’s not much interesting in other maturities.

It’s difficult to get a liquid future market. TOM failed miserably with their AEX future market, and won’t even bother to launch futures on their NL20 index.

Quoting Adam Rose, head of financial derivatives at Euronext:

“This is a good example of how we want to drive growth in our derivatives franchise across Europe by being innovative and responding rapidly to client needs”

True. Euronext is absolutely the first in Europe to launch weekly futures. In reality, there is a reason these things don’t exist anywhere else on the continent. For example, take the most heavily traded index product in Europe, the Eurostoxx. The Eurostoxx futures are quarterly futures – they don’t bother for monthly maturities.





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  • anonymous: ROFL @ 12:26am not getting the joke. [...]
  • anonymous: ASX option volumes have been in a death spiral for more than 10 years. Why bother having overpaid tr [...]
  • anonymous: optiver and imc, duh? [...]
  • anonymous: great dutch mm what's that ? [...]
  • anonymous: it sounds like its less of supply issue and more of demand problem, if people aren't trading why wou [...]
  • anonymous: Lynx aside, seems like another dutch MM is about to bite the dust: http://www.afr.com/p/business/ [...]
  • anonymous: first, here we go with the Sunday night posting by jack of clubs, people are so predictable qu [...]
  • anonymous: that's very insightful man, keep it up [...]
  • anonymous: According to this Pieter didn't start at SC until 09: http://www.moneyhouse.ch/en/p/van_hasselt_pie [...]
  • anonymous: www.linkedin.com/pub/pieter-van-hasselt/45/91/33 [...]

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