It sounds like ages ago when Optiver was hammering the oil prices. It has been five years since the evil Hammer has been used in 2006, and court case is still dragging on. Here’s a perfect short official summary of the situation in 2006 to fresh up your memory. Love the quotes (“You should milk it for right now because you never know how long it’s going to last“). Anyway, the careers of the main three suspects haven’t exactly enjoyed the CFTC attention. Dowson is gone, van Kempen left the firm two years ago and recently MD Randal Meijer was given the sack. Within Optiver apart from top management nobody seems to know why. CFTC fine is expected this year.

The other expensive battlefield is continued on 31st of May, when Tibra can submit evidence they did not steal trading secrets from the ultra fast F1 trading software. Within ranks of Optiver some folks describe the F1 software as “junk”, and offices not using it and arguing about it has been the running gag of 2010.

PMM play off

There is some more colour on the play off for the primary market maker roles in Aegon, Akzo and Ahold. Optiver has been defending their pmm roles to contenders 323 and Nino. Quoting tight and for large volumes gives you a quoting quality score – and over two months the best one wins the pmm role (pmm is quoting all series, having more capacity at the exchange). The head to head game isn’t good for margins, but perfect for the competitive spirit. Here are the lucky numbers, with the winning firm bold.

  • Aegon : Optiver (87), Nino (84), 323 Trading (77)
  • Akzo : IMC (84), 323 Trading (82), Optiver (72)
  • Ahold : 323 Trading (83), Optiver (74)

Optiver is relegated in Akzo and Ahold, with small 323 Trading filling the gap. The benefit of the obligation to quote all option series is subject to debate, with the tiny bid-ask spread the market makers do run serious risks. It seems 323 Trading has a strategy of accumulating pmm roles, and they stick consistently to their mission. Note the large gap in the scores for Optiver, lagging far behind in two stocks. One would suspect the management forgot to tell some traders they are participating in a play off competition. Ahold isn’t too hard to quote.

140m profit in 2010

There’s some good news on Optiver as well. Last year the firm made 140 million (we need to wait till early 2012 for confirmation), with the most money earned in the Amsterdam office, followed by Chicago and third place the Sydney office. Good to learn the profits rebounded after the difficult 2009.