amsterdamtrader

After years of begging by the rest of the market, the *ahem* prestigious firm All Options is about to give classes in option trading. Clean your agenda and cancel all appointments for November 10th and 20th, as the master classes will be free of charge and aimed at the very advanced option trader. Euronext and All Options will spend three hours on some Greek variables like vega, theta, gamma and delta. Meet your teacher in this student magazine (pdf, Dutch), seems a reasonable guy. Bad news however is the timing schedule, as the session runs from 10:00 to 13:00 on Beursplein 5. Hence, don’t count on post-class drinks.

You can apply for the free master class by mail. Question remains what a retail investor should do with extensive knowledge of the derivative pricing theory. Nothing really. Market makers compete for split cent margins with full delta hedge, retail folks would burn their money on transaction fees. Nevertheless, let’s not be too cynical and negative about Euronext/All Options joint efforts, although a true step would be to reduce trading fees for retail clients on Euronext. It’s a way better approach than handing over your customers to the sharks of Optiver. Did Binck’s head of retail Marcel Kalse quit his job after resisting the plan of selling their retail customer flow to Optiver?

Susquehanna International Group has successfully taken over some of the primary market maker spots which came available after VDM went out of business. However, they haven’t exactly conquered the crown jewels.

PMM & CMM
As a primary market maker (pmm) one has the obligation to send quotes in all series in an option class. Short term, long term and even deep in-the-money options will have to be quoted. In return for this obligation the market maker doesn’t get paid, but its full presence in the market could generate a profit. Euronext supplies extra bandwidth to the the primary market makers.
The competitive market maker (cmm) receive less bandwidth, and are obligated to quote a minimum amount of at-the-money options. Twice a year the pmm and cmm licenses are auctioned by Euronext, based on subscribing to tight spreads and a large quote size.

Susquehanna
Susquehanna (wiki) will start as primary market maker in the following eight option classes : Air France, Crucell, ASMI, Nutreco, Vopak, Draka, Fugro and Wolters Kluwer. Must admit they have a strong appetite for the illiquid problem children of Euronext. Nobody wants to gurantee liquidity in these stocks, but Susquehanna is willing to give it a try. In addition, they signed for all competitive market maker licenses available. It’s the very first foreign market maker becoming primary market maker on the Amsterdam derivatives market.

Other VDM leftovers are taken by Leopark.

For the second time in a week I mistook very serious news for a joke. It started with a fresh president receiving the Nobel peace price. Five days later the local market maker All Options announced interest to buy the remains of DSB Bank.

The big chief of All Options, Allard Jakobs, is notorious for his megalomania. Nice to have oversized ambitions, but it would make sense to stay in touch with the real world. Buying a troubled rival market maker isn’t comparable to taking over a collapsing bank. A consortium of five major banks didn’t want to bear the risks earlier on. But Jakobs smelled an opportunity.

Anyway, the administrators of the failed bank DSB and the Dutch national bank must have thought the same thing. A relatively small market maker in options isn’t the most likely buyer of a bank. Putting up 5 billion euro guarantee is something different than financing a few million of Van der Moolen spin off Alphabay. Oh, and please – put up the money in a few hours and stop wasting our time, must have been the additional message.

Labour unions dream of the white knight
The labour unions cried foul. Let’s give the very “serious” and European institution a little bit more time to take a crash course in “banking for beginners”. The administrators of DSB bank wasted an opportunity to save 2000 jobs.. Could anyone call the labour unions that most of the derivative trading houses had a good laugh reading the story of All Options (or All Capital) buying a serious bank?

One may wonder what mister Jakobs was thinking when Lehman Brothers went down one year ago. He must have been waiting endlessly for an invitation by the New York Fed to save the bank.

Update 1:
Spokesman of All Options (“All Capital”) denies involvement in the Dutch newspaper de Telegraaf. Sure.

Update 2:
According to administrators of the DSB Bank, they turned down All Options (“All Capital”) as a potential buyer. Spokesman Martin Strijk from All Options claims they never wanted the DSB Bank anyway. But nobody believes him.

Update 3:
De Dutch magazine Quote shed some extra light on the matter.

After such a massive collapse with several interesting plot side stories, it’s hard to come up with a new subject. Luckily Van der Moolen recognized this and organized a kind of shareholder meeting this morning. Richard den Drijver won’t show up, as he’s on the run and hiding somewhere down south.

He even didn’t have the time to update is profile at the board of the Swiss boarding school Aiglon College. The school’s code of ethics are in fine contrast with the recent news coverage of mister Den Drijver (“humility and selflessness”). This boarding school appears to be one of the most expensive and exclusive of the world. They will get rid of RDD before Christmas, I assume.

Junior selling during lock-up
Selling his Van der Moolen shares during a lock up period is illegal. He sold all of ‘m at around 37 cent following the creditor protection. What makes it special is it’s fairly easy to prove. A fine duty here for the financial watchdogs who could make up for their earlier mistake of letting the man control the company on his own. According to former employees the RDD Family Foundation was able to sell the VDM shares during closed periods as Richard den Drijver didn’t run the foundation himself. His under aged son is legally in charge of the foundation. The Aiglon board member is apparently some kind of the late Michael Jackson; very good with children. And a sort of a freak, too.

Mr. Van der Moolen & sons
Then there’s the other family guy, also good with (his) children : Hans Kroon. All nasty rumours on handing over money to his children Gaby and Maurice and his brother Jimmy turn out to be exactly true. The (Dutch) website 925.nl nicknames the man “Mr. Van der Moolen & sons”.

Tax rebate ship arriving
Company is expecting 32 million euro from the German tax authorities to arrive any moment. Half of the money will be going to GSFS, the company of tax specialist Frank Vogel. I’m wondering what happened with VDM’s part of the claim. As the company was desperately searching for cash and time was running out, VDM could have sold their tax-claim with a huge discount to GSFS. That would have been a correct decision, but with the money ship arriving shortly afterwards a bitter moment of bad timing. Note: this is outright speculation, but GSFS was trying to buy the claims.

The shareholders won’t see a penny from the 16 million tax rebate, that’s for sure.

This morning the supervisory board duo Zwart and Paardekoper are giving some extra information in the meeting. Mainly thanks to FD’s journalists digging deeper in the corpse of Van der Moolen, most dirty laundry has already been exposed. Eventually the DNB or AFM will start extra investigations. Richard den Drijver will have concealed his tracks perfectly.