Weekly options for single stocks launched
One may have missed it easily, but last Friday during the July expiration three new classes have been introduced. The weekly options on Arcelor Mittal, ING and Royal Dutch. All innovations are usually received with a warm welcome by Amsterdam traders, as long as it is options on something liquid. The dividendfutures are still waiting for their very first trade.
The volume wasn’t very spectacular, but during a slight sell off in a big expiration the traders have other worries on their mind. Last Fridays sell of was followed after the weekend by a new bargain sale, this time of the option volatility. Strange, after such an ugly Friday.
The ING weekly options were most in favour, trading almost a thousand lots. The pie graph doesn’t really show any real information, just comparing the low volumes in the different weekly stock options. Together the volume on the regular options is more than fifty times bigger for these three weekly stock options (1700 vs 102.000). It’s Euronexts turn to cut the fees, and this trading volume could grow bigger as a result.
Short, completely unrelated, news on Optiver. They made it to the list of top 50 Australian employers, number 35 between mostly unknown and smallish law firms and groceries. Insiders tip Kokomo Capital for next year’s edition. FT Alphaville has put some effort in explaining what Optiver has been doing wrong in their alleged market manipulation with Trade At Settlement futures (TAS) in the USA. Case is still ongoing, though.
No comment
i’ll second that !
What a shithouse list. I bet Tibra will be furious they are not on it and the marketing department are suing the owners of the website as we speak!!
Who are these Kokomo guys? What do they do? They don’t even have a website…
The founder, Diederik van der Reijt, was a trader at Saen for four years and then he started Kokomo .. that was three years ago .. something tells me not to be ‘too long’ on this one .. of course, insider knowledge could shed more light ..
Diederik was a trader for Curvalue, not Saen. Good trader and nice guy btw, and he’s still doing very good down under with his firm Kokomo.
what’s their biz model ? earlier they had the name of LTS Market Making and now they seems to have re-branded to reflect that they are in Quant trading .. do they do hi-freq arbitrage/spreading activity or is it back-tested algo trading .. how does such a small company cover their fixed cost .. or they into some dividend arbitrage as some of the European trading houses ?
yeh I think only back tested algo trading and index arb, they’re apparantly doing pretty well. They’re still hiring but it’s extremely hard to get in, they only take top 1% mainly phd’s and only computer scientists and engineers they have offices in HK and Sydney and I think they just opened in NY also
how does such a small company cover their fixed cost??
Hmmm let me think….
Ah, because they’re such small company and don’t have much overhead like All options for instance…
i am not talking about the overhead at All Options .. i am talking of the overheads in a small company as Nino, Alphabay, Caerus etc .. if its not difficult to cover the overheads in places of those size, well then that’s not much good news for bigger players like AO as the smaller players would nimbly encroach the profitable areas without much barrier ..
There are start up costs for the smaller firms which are not inconsequential, however if you have a small lean organisation without the bloated cost centres of middle management, large HR & IT departments the overhead is pretty manageable..trading system costs, office rent, bloomberg/reuters and then possibly salaries (although in some small firms traders may not take one). The fixed overhead per trader at a small shop is significantly less than at a larger trading firm or investment bank
True. But the small firms lack the size and deep pockets to innovate, and extra costs (co-location for TOM!) eat too much out of their overhead.
piet, lack of size and deep pockets are hardly a barrier to innovation if you know what you’re doing
Anon, partly agreed. Serious innovation is done by individuals, but issues like implementation, testing, bugfixing, connections etc usually need a larger staff. You don’t have much time in this market to make an idea work.
If i join, is there any chance of getting some equity in alphabay? Who are the owners?
err .. the crooks ? how can VDM shareholders allow somebody to steal 3m EUR right from under their noses .. for a trading company as VDM, i am surprised that there was not even one half-sophisticated investor who could pursue this .. is this case too hard to pursue in legal courts ?
there are more than 37mn VDM shares outstanding, i suppose the holders of those are not bothered for the 3m discuount ? how much would have AO/TIbra/IMC/Optiver would have wanted a discount on it ? quarter/half mil ?
Crooks are RDD and Hans Kroon.
They have nothing to do with Alphabay, which are reasonable guys.
wow .. stealing 3mil is reasonable : )
i myself wud like to be reasonable, but on second thoughts not reasonable like the above ..
Don´t be fooled. Egbert Pronk (VDM European management, ex Curvalue shareholder and RDD confidant) is as much to blame for the downfall of VDM as are Richard Den Drijver and Hans Kroon. The latter may have reaped the greatest financial benefits from the destruction of VDM, but the securities transfer (Alphabay getting the VDM positions with more than 3m discount) perfectly illustrates that Egbert is just as much a crook and responsible for stealing the company dry. It was Egbert who was assigned to look for a buyer and he did a TERRIBLE job, no doubt on purpose, dragging it out until the eve of the bankruptcy at which point VDM had their backs to the wall. Egbert and VDM management were very “good” at making up excuses why competitive bids from other companies should be dismissed. In the end VDM replacement CEO Peter Zwart came up with silly excuses why it was best to transfer the positions to Alphabay. Read the press release. Let me repeat two of his arguments. “It was convenient, because VDM and Alphabay both cleared via KBC.” (Then it’s worth the extra 3m discount! As if Fortis clearing could not have handled this transfer!) And “this way, we saved a couple of jobs”. (As if the VDM creditors give a damn whether Egbert, Rick Smit would be unemployed!) Read between his lines and you´ll see what a scam it was. The VDM liquidators have not questioned the transfer. Why would they, they signed off on it! (They were probably too stupid to comprehend the travesty that took place and the devious timing, right before the September expiry that would have shrunk the positions dramatically. They even called the transfer process “complex”. Maybe it is to a legal person, but not to this option trader.) That will probably change once the creditors start questioning the liquidators´ competence at the time of the transfer.
Well, talking of Optiver and overheads – Quote reports that Optiver has filed a 6,3 mil LOSS on its 2009 year operations.
http://www.quotenet.nl/quote-500/winstmachine-optiver-hapert.php
Come on Bob, read carefully, 6.3 mln profit.
Sorry, my bad. Read it too fast, realised my mistake as I posted.
Well, still a shocker! As I believed their diversified trading business would withstand better. Significant cost savings required. Their operating loss in the US wasn’t unique then.
thats a pretty shocking result alright, I presume that number is net of all employee compensation? I knew last yr was tough for market makers but I though an organisation as big as Optiver would have been diversified enough to still post a reasonable result…how are the bigger MM firms doing this yr? Alot more volatility but volumes are fairly poor overall
what does diversified mean when pretty much all 2009 volumes (across the globe) are down compared to the exceptional 2008. I’m pretty sure 2010 is back to ‘normal’ for the bigger MMs, may and june will have helped a lot.
Diversity in a small organization as Optiver is very limited .. their sense of diversity is quoting all the vanilla options in stocks/index/fixed income .. the arbitrage business is again limited to pair trading pretty much .. Once the volatility and Volumes go down, they really cant do much .. they dont have all those various asset classes, clients, banking, investment biz as the ibanks .. quite a bit of partners and traders are leaving optiver/trading altogether to do something different as market making/trading is going to be lean till next huge explosion of volatility and volumes ..
It’s Diederik’s brother, Bas, who is making the difference
I like Diederik too.
They are both good.
[off topic] Jack: why is it that since the new layout (which by the way, is quite a step back imho) google reader doesn’t recognize new updates anymore?
i am new to this .. what is a Google reader ? and what is the process of recognizing new updates ?
i don’t have any trouble at all getting the RSS feeds