Smoke signals from Optiver USA
149 comments / January 20, 2010
This website is usually focussing on the Amsterdam derivative markets and its trading firms. However, always very happy to make an special exception for Optiver. The firm is still involved in the case of manipulating oil prices in the US, and the US Commodity and Future Trading Commission (CFTC) is still serious about it.Optiver also in bed with Binck
The same firm is still joining forces with Binck in their joint-venture TOM : a would-be search engine for stock prices for investors, but in reality is only searching for ways to channel all retail flow straight into the books of Optiver. With just one market connected (Euronext), there isn’t much else to search for.. The joint venture recently fired the manager Jochem Lubbers and replaced him with former SNS Securities chief Willem Meijer.
Firing spree in Optiver USA
Back to the US. Smoke signals from their Chicago office aren’t always easy to interpret, but there’s certainly something burning over there. Some 10% of the staff has been fired last week. That’s around 20 people. The entire management team has been flushed down the toilet as well, for the second time in three years. One may wonder what kind of trading results in the US inspired the recent lay-offs.
Good news for the CFTC. One of the prime suspects in the fraud case is still working there. Well, at least mr Dowson is still on the payroll. He doesn’t feel the need to show up in the office anymore. It’s a stressful job.
Dowson is a f*cking piece of british dogshit
Is Dowson MD of Chicago office ?
Most of you fockers arn't fit to lick Dowson's boots.
I remember interviewing in the company in end 2008. There were only 35 – 45 people. Are there 200 people there now ? (180 after lay offs)
They grew so fast ?
so how much did they lose in US last yr?
I think its not about trading loss..may be they r expecting a big fine from CFTC….Hiring and firing is one model that worked for Optiver to get the quality talent very cheaply in last 3 years. So,lay-offs here should not be viewed as "trading losses etc.."..I guess its just a regular HR activity..these useless guys also have to answer something in their yearly performance review..
I would like to hear more views…..
Did Dowson fire the Chicago HR as well ?
I wonder if still being on the payroll = buying more speedboats?
9:52 you obviously work for optiver US and are trying to make them look good.
2009 has been the worst year to be an options market maker in the US because there is no paper. I can imagine they are making a loss this year because no one in America has made money.
noway..Neither I am working for Optiver US nor trying to make them look good..thats just a neutral view..and thats why I asked for more views – what do u think can be the reason for sudden lay-offs..
1:06 ok peace.
I think the reason is really trading revenues and not the CFTC case which is very misleading in this blog.
IKBR which is the industry benchmark for option MM firms has had a bad year(although still in green). Thomas Peterfly the oldest and smartest guy in the business has said that he has not seen bid ask spreads so tight. Tight markets mean less money for MM firms.
seems logical..
Maybe a stupid question, but what is IKBR? And Where did you see those comments from Thomas?
IKBR = imteractive brokers aka timberhill
the comments were in press releases after quarterly results
ok, thanks for the quick answer
I wonder how the writer knows about the management team? If that is the case I wonder if firing the management team is just a ploy to show the Cftc that they are serious? Seems like a very unstable place to work(having to worry about job sercurity, etc). Also, how can they justify keeping Dowson on?
Dowson was management's favourite..is he still ? someone pls confirm..
They still love him espicially Randal who needs him for the Optiver football team.
football team is ok..but what the f is he doing as a trader or MD or whatever..there in Chicago?
Who is doing Dowson's job if he is not even in the office?
how do the guys still have a job ?
Too bad Obama is clsoing gitmo. I'm sure there are some provisions in the patriot act that would allow the U.S to send him down there and enjoy some c*ck meat sandwhiches from big bob
-The office lost about 20 million US Dollars.
-Dowson works from at home on "special assignments". How can he keep his visa?
-Partners and traders are walking out the doors.
-There's much more…
9:46
Did they fire traders, or did partners and traders leave or both ?
what are "special assignments"..that too at home ?
No need for options after Obama kills the banks
No prop trading at banks with deposits.
That will kill the OTC market. Ripple effect will be felt to all market makers. No more bonuses for MM's. Lets all find new jobs.
IBKR still making decent money, i would say it was the best Market Maker in 2009
http://www.interactivebrokers.com/download/Q4_09_earnings_release.pdf
Yeah I've only heard good things about IBKR. Does anyone know how big they are? I agree with some of you, 2009 was a rough time for most MM.
Especially the bonus structure at IBKR is "very" interesting for the average trader, especially if you take into account that they are mostly easy-to-replace pilots.
@12:38 -> Why would that kill the OTC market? I think OTC's at Banks for prop-trading is only a small percentage of OTC's done at Banks. And, what do you think will happen with the prop-desks from the bank ? They will be put in SPV , spin-off ect.
what % of net revenue can a Timber Hill trader expect to get paid (its discretionary there I think)? Also I've heard their theoretical pnl is what compensation gets based on, sounds crazy but I heard this from someone in the US
Are there any firms here in the Netherlands that traders are allowed to trade in their own account instead of discretionary?
plenty
mkt wizards for exmpl
Market Wizards, Nyenburgh, Better Options, Cebulon, Effective traders. In the past also Accent Casino and ITC, not sure if they still offer that.
Sorry, mixed comment – but you can trade on own account in most Dutch MMs. And on prop desks, flow will be re-routed, but the new legislation may be implemented like the FSA does, just lower clearing ratios. Will only reduce it for a while. The big banks make far too much profit from trading activities – they'll complain, but won't cease. CreditSuisse made 90% of new profit from prop trading! However, these changes will take a long time to be implemented. Don't start panicking yet.
Timber Hill is more an IT than trading company. Read their SEC filing. The whole management constists of IT people. I cannot even imagine what the job of a trader there is. A handful of traders trade all European markets. They just have to do what the model tells them to. On the floor it was more or less the same. Don't expect anything from the bonus..
Spoke to a TH trader once. His job was:
– realign the curve & skews in the morning
– for the rest of the day watch if the system doesn't crash. System will do all the trading and readjustments by itself.
bonusses are very low.
Did they fire senior traders as well ?
I've heard rumors about dowson's cocaine addiction while he was here in the Netherlands. Not sure how he is doing in the states.
I heard about those rumors as well.
I think some of the above points make sense and others do not
I guess Chris is being sacrificed for the CFTC debacle and probably for losses last year.
Rubbish like cocaine addiction etc. is just bullshit by guys who wish they could trade like an adult (like optiver does) and want to gloat on someone else's losses.
Maybe you too would hv lost 20 million if someone trusted you with more than pocket change
@10.13pm
I think if you are going to spread malicious rumors like this you should be a man and not do it anonymously.
It is exactly this sort of shit which might get this website closed down sooner rather than later when somebody sues.
IF you had any balls whatsoever you would at least tell everybody who you are.
You are a pathetic excuse for a human being and a coward sir.
it will be atleast a $50m fine in order to make an example of optiver. the big issue in the states is not that optiver did this (as lots of other groups were doing exactly the same thing), but they lied to the cftc and the cftc have them on tape. its pretty serious!
@ 9:39 on 21-1-2010
please provide more information
@ 8.42
It is my understanding that Dowson was not the person who lied to the CFTC but it was the MD Bastiaan Van Kempen. Can someone confirm this?
Optiver trains people to lie and then they call it trading like an adult. I'm having trouble with this one.
If they're fucking the market they should be held accountable. Make an example out of them. Play the tapes to the American Public. Has Obama heard the tapes yet?
Any takers on the CFTC/Tibra P&L Spread?
I'm $40m bid on CFTC damages. They tried to fine Enron $35m for manipulation, and I think they'll be out to set a big precedent given what has happened globally in the last two or three years.
And I'm $0m offered (in size) on Tibra – court costs will push it into negative territory.
I buy your $0m offer. the evidence is so clear and overwhelming, Tibra will have to pay up heavily
when is the sentence gonna be in the Optiver/Tibra-courtcase?
@ 12:52. What do you mean by they train people to lie?
4:08 PM
Last known news was that their codes were subject to inspection. No update since.
AJ is firing people at AO, motherfucker…..can I apply at optiver? I am senior trader
Sure you can. How about a 500K sign on bonus?
optiver and all options are firing people. neither making money
Go to Tibra then. They're still hiring. Just click on the ad under Hoyle's.
I can imagine traders in Timberhill won't be paid well.
I read some interview article, Thomas Peterffy recognised IT programmer(not traders) as their most precious assets in the firm.
http://www.cftc.gov/newsroom/enforcementpressreleases/2008/pr5521-08.html
On the right hand side are links to recorded phone conversations, one of which was a conference call with Nymex. I haven't listened to them for years, but from what I can recall I think it was Bastiaan.
There are transcripts of the conversations as well …
And as for the Tibra case:
https://www.comcourts.gov.au/file/Federal/P/NSD681/2009/actions
Tibra filed their defence on 23rd Nov 2009, and there is a directions hearing on 5th Feb 2010. No evidence filed on either side as yet, so my market as to when a judgement will be made is 6 months bid, 12 months offered.
I have to say there are strong indicators that the IT-driven firms are doing the best – DWR, Tibra, TH, Getco – all invest heavily in their tech-side. All made good profits this year. These ones are almost completely algo based (not including the big banks as well which we know invest a lot in tech). It seems screentrading is not upscalable. Humans cannot compete against computers.
I buy 12 months..what size are you offering ?
Optiver should whack or bully tibra to make them pay up
How can they do that?
by burning their office on singel
The ghost of Herman Brood finishing off what he started?
10:12
I always thought screentrading = algo based ?
The algos are used to make trades faster. also the broker market is not going anywhere. It is here to stay for a long time to come. The pits did disappear but all it did is take all brokers upstairs on phones. Thats it
Who needs brokers when you have the 'hammer tool'?
10.12 – jeez guys?!!
Seriously – if you're new to this game that is fine but don't make yourself look like a complete idiot since it's obvious that (a couple of) you HAVE ABSOLUTELY NO CLUE!
lord have mercy
fucking muppets… I guess this looks like you right?
http://fuckingmuppets.com/
What do you guys reckon are good books to read as a junior mm?
Hey A 8.46
For fuck sake – you can't even be bothered to go on the internet and find out what book to read for yourself?
All major market makers who have websites have recommended reading lists…. here is one
http://www.drwtrading.com/careers/recommended-reading-list/
dude if this is your attitude nobody will hire you
I agree with the other guy, fucking muppets
Take it easy son
some of you guys are very long yourselves…
@ 21-1-10, 9.39pm
After reading this I realise you must work in US office. Can you explain more please?
I am 3 bid for the number of holland based firms on this site which will file for bankrupcy by the end of next year.
Also any news on the hearing of the Optiver vs CFTC case ? Did they have a hearing yet ?
@12.50
I'll buy your 3 bid and offer a 5 put Nov10
Stupid; he's 3 bid. wat een drukte he op de markets. Pfffff
1:12
LOL..I am bidding 3. So i guess I am in front.
I think 5 is sort of my theoretical value.
Sold, what size?
I'll hedge myself against all of you by hammering the TAS
CFTC vs Optiver:
Optiver currently have a stay of proceedings (unsure why), and resume on the 14th of May 2010, when they are required to answer the allegations.
An actual hearing is unlikely until at least November.
Who wants to make a market on the time difference between Tibra and CFTC verdicts?
@ 8:23pm
What's your market if you don't include the VDM spin-offs?
get a life you morons..do nothing but gossiping..i wonder how many of you are even average traders..sour grapes!!!
Surely "gossiping" is the whole point of this blog, moron.
alot of pent up aggression on here fellas, lighten up, mkt not busy enough for you??
gossiping on this blog is fine, swearing is not
I would make a comment on this but I have a fat bump sitting in front of me
What are the different market making styles between the following firms? Optiver, Tibra, Timber Hill, DRW, IMC, Liquid and etc? From the posts above, I get the impression that Timber Hill is more automated than the others?
Optiver, Tibra and IMC are the same operation under different managements, Timber Hill is all about the programmers no traders, their machines tend to f*#$ up when an altana or volkswagen happens because there is no one to use judgement. DRW and Liquid no clue. By the way is DRW big in europe ?
Optiver may be big in the Netherlands and Australia but they aren't even top 100 in the US
Optiver can never be big in the US after this breach of ethical standard.
the biggest in Usa is Timber Hill
Citadel & Wolverine pretty big equity option MM's in US as well
@ 9:39 on 1-21-2010
do you know that this is proprietary information and Optiver US can probably sue you?
All these rumors are just sickening. I dare you to keep it up.
@ 9:53pm Jan29
Are there any other market makers that have operations similar to Timber Hill in europe or US? Are there any other large market makers that have similar operations to Optiver, Tibra and etc?
Top 3 automated equity MM systems in the US are knight, timberhill and citi, next level are citadel and drw, although not using machine learning nearly as much. Another thing – tell me what part of what is said above is proprietary info, for which one could be sued? It is not as if anyone here is posting any of your in house algos on the internet? (whoops sorry, I know that's a touchy subject post Tibra…) Get over yourselves Optiver – you are not the big dogs you think you are
I was very surprised to know that Goldman is not an automated market maker. Dont they have the leanest meanest IT systems and programmers ?
One question that comes to mind after listening to the files on the CFTC website is: what happens to the traders that executed the trades? Are they held responsible? Or only Dowson?
I realise that they are only doing their job but they are the ones that executed the orders.
Indeed the cftc only claims the three masterminds as defendants.
you mean the three stooges?
http://www.bloomberg.com/apps/news?pid=20601109&sid=aNykT4DvHd9A&pos=11
In 5yr Optiver US will be number 1 MM in world. They are just going through growing pains right now, you just watch!!!!!
number 1 in MM -> Market Manipulation
looks like we have a very angry Optiver lifer on here, chill out you mug
maybe the employee's offshore accounts to avoid taxes are the 'special projects'. wouldn't the tax authorities want to know?
http://www.amsterdamtrader.com/2009/07/employees-wanted-at-trading-firms.html?showComment=1249895095612#c938747580378787865
Something that came to mind:
If partners and traders are walking out the doors that is just wrong. True employee's will stay during the hard and good times. If I was MD of the US office I would give no bonus/raise for this year, wait a few months to see who sticks around, and then surprise them with a hefty compensation package. Only then will you see the true and loyal employee's who are not only present to collect a paycheck. Everyone is hurting in this recession and can't expect to be millionaires.
Of course this only works if raises/bonuses haven't been given yet.
yeah, that's the all options strategy!
What trading software are All Options and Saen using??
Rumor has it that Optiver's balance sheet is to the likes of Citibank's
Rumor has it they are closing Optiver US by the end of 2011.
Why would they wait until 2011?
s
They will close the office in 2011 because by then Dowson will be in jail
Roel, can you delete this spammer
This spammer is obviously wrong. The most successful tool for 2010 is the hammer tool.
https://www.comcourts.gov.au/file/Federal/P/NSD681/2009/actions
Optiver have requested more time to prepare their evidence against Tibra. Another directions hearing is set down for the 12th of February.
Looking less and less like a slam dunk case every day.
Why does Optiver continue to pursue this legal matter? Clearly their software isn't worth millions of euros in legal fees if the "US office lost 20M last year".
doesn't matter, you are still not allowed to steal code like the Tibra guys supposedly did.
It's a matter of principle, I guess.
Tibra = bunch of code stealing wannabe's…
Watch what you say arsehole or you will get your butt sued for libel, mate
boohoo mate, those nasty dutchmen picking on you?
Optiver is upset that tibra stole its code and made it better 🙂
I agree with Feb 10, 8:52pm – I'd be _very_ careful of what I said "anonymously" on blogs.
Plaintiffs can issue subpoenas to companies, forcing them to divulge IP information, and invariably they succeed.
http://blogcritics.org/politics/article/google-subpoenaed-for-ip-addresses-to/
Libel is the act of issuing defamatory statements that are false. Given that there are proceedings underway to determine that very fact, it would be unwise to put forward an opinion as fact. If Tibra chose to pursue you, and were able to identify you (via your IP), they would have a fairly straight-forward case.
Thanks Brant @ 7:54pm for the heads up
I wrote the comment at 7:54pm, and I have no idea who Brant is. Guess again?
@ 7:54, that's not true.
Comments on a website like this are anonymous and will always be. Google has NEVER revealed the IP adresses of comments.
Google handed over the IP address (and email address) of the owner of the "Skanks in NYC" blog – her name is Rosemary Port.
You might be able to make a case that the MAIN ARTICLE of the blog carries different weight to the COMMENTS on that blog, which I think would have a better than 50% chance of success ..
.. but we're getting off topic: when is Optiver closing down, and which strategy dropped $20m last year? 😛
You can make a connection between the comments and the blog owner as well. Anonymous blogs are no protection.
But hey, we all know who runs this blog anyway.
This blog is run by Tibra and Hoyle!
Good job mate.
What I find hilarious is all this banter between Tibra and Optiver is only shittin in your own nest….hahahahah. The higher the profile this legal matter generates the more questions the regulators (and the everyday investor) will be asking about how you guys make your profits, and the net benefit that providing this type of 'liquidty' has for the market. If we get to the point where the volume of trading on markets is speculators, speculating on other speculators not only will you screw yourselves over eventually, you screw the everyday person on the street just like those executive that onsold doubtful mortgage securities. Do you guys have a concience regarding HFT?????? is this just a little game for you?????
@ 12.29: Screwing average joe; with what? ever smaller spreads? lower exchange fees through competition? market making is not exactly speculation trading either as far as I know..
what is it then????? what do HFT traders contribute to the macro-economic system (apart form lining your own pockets) and its stability????? HFT destroys the investor/company relationship and investment in fundementals which generates real distribution of wealth in the real economy. Cmon….'holding' positions for less then 1 second, millesecond…….liquidity my arse!!!!!
It's all about providing some good ol' liquidity and capturing the spread! In my best Captian Kirk voice, "warp 10 on the hammer tool Mr. Dowson!"
Lol. That's funny!
hahahahahahahahah……just as I thought, you love slingng shit at each but gauging by the lack of responses to my previous posts, nobody wants to have a debate about the merits of HFT and supposed benefits to the global financial system. Perhaps because it isnt defensible. I spose you guys are too busy making money. No wonder there was a wave a communism after the depression/WWII!!! Guys like you screwing up what is a good system rewarding real innovation and risk which adds to the real economy, not symphoning it off with low latency trading. Well the regulators will start slinging shit at you; your attracting attention because your a bunch of petulaent,indulgent, greedy individuals fighting amongst each other (which this and other threads show) with little or no respect for the financial system, and a belief that the amount of money and bonuses equates to superior intelligence. If you want purpose get out there, apply that so-called intelligence and contribute and build real businesses.
spot the nut in the fruitcase. you must be an american, right?
anymore questions or you do you want to present your case
There is no point in debating this with you. You obviously don't know what you are talking about, and judging by the tone of your posts you have no intention to change to mind, whatever we say.
So why waste time when we can make money providing liquidity and make the markets better and more efficient?
HFT subsidises technological innovation. That's the contribution. They all bite each others' throat for the same pie, and have to keep investing in technology for it. A dead end, but society benefits in a way. It's not my cup of tea either though…
there's no HFT in handing out mortgages to americans who shouldn't even be allowed to buy a comic book on credit is there…. so why make the connection to the collapse of the financial system?
HFT RULESSSSSSSS DIPSHIT. LONG LIVE DA HAMMER!!!
I see they are making a sequel to the popular Wall Street movie in America titled "Wall Street: Money never sleeps". I am submitting my request to Oliver Stone to produce a part three titled:
"Wall Street: A coke head and his hammer tool"
Story from down under:
http://www.smh.com.au/technology/technology-news/cyber-poisonpenner-hunted-down-and-sued-20100224-p3n7.html
Har har har mate
how strange?! I added a comment yesterday eve which looks to have been deleted! hmmm. So to repeat myself – Dowson is in Sydney being cared for and his parents are living in Ilkley, England. So I hear…
good..
[…] Illegal things and pushing for the unethical road? Another hard-hitting Hammer at work, whacking the oil? Doesn’t sound very likely after witnessing the other Dutch market […]