Barings jasjeThe Dutch option market is a small world. Europe’s oldest option market has a couple of foreign trading companies in the electronic pit. Yet, the biggest market makers still have Dutch roots.

The secretive nature of trading means it’s impossible to rank the market makers in terms of market share, headcount or profits. Juicy rumours of competitors in trouble are frequent and often exaggerated. Salary and bonus deals vary.

Ranking liquidity providers by licenses

However, it’s possible to have a look at the quantity of liquidity provider licenses. They come in two flavours, primary market makers (pmm) have the duty to quote all option series in a stock, while competitive market makers (cmm) have the obligation to quote a limited number of near-the-money strikes. Both have a few pro’s and cons, but generally speaking the pmm licenses are harder to obtain and more valuable.

Closed shop

It’s a closed shop and newcomers are barred from entry because the liquidity provider licenses are limited in number and some companies still benefit from first mover advantages.

This is the list of the market makers on Euronext Amsterdam ranked by the number of liquidity providerships (between brackets). More licenses usually means more traders or more advanced it-systems – but for sure more quotes and influence in the market. Tibra is Australian, Hardcastle and Timber Hill are American and from Germany there’s Archelon. Note that the two banks in the list probably only send quotes to benefit from the trading fee discount. Smaller companies haven’t been included in the list.

  1. Optiver (55)
  2. Curvalue (50)
  3. Saen Options (49)
  4. Tibra Trading (47)
  5. Goldman Sachs (41)
  6. All Options (41)
  7. Timber Hill (34)
  8. Scrocca (29)
  9. IMC (26)
  10. 323 Trading (21)
  11. Leopark (21)
  12. Hardcastle Trading (20)
  13. Munnik Options (20)
  14. BNP (19)
  15. Archelon (19)
  16. Calimero (11)
  17. 2B trading (9)
  18. Cho Option Traders (8)

Source: Euronext. Information per January 1th, 2009. PMM + CMM added together, bankrupt firm Intal left out of the list.

Jack
Jack