Dutch unite to create European lobby for HFT
The market makers in Amsterdam have a pressure group for defending their rights in discussions with governmental institutions like the trading watchdog AFM, the national bank DNB and all other sorts of (semi) government. Recently in focus was the proposed limitations in handing out bonuses to employees – talks are still ongoing. They don’t waste their time as much online as I do, as their slick website is still outdated with a member list resembling a financial graveyard. However, behind the screens they do have a surprising lot of influence. Time to move on to higher levels.
This week the big three Dutch traders (Optiver, IMC, Flow) announced to have joined forces with Getco to start a lobby in Brussels dubbed the FIA European Principal Traders Association. While originally from the US, Getco is a worldwide electronic market maker and high frequency trader – similar to Citadel . The chief in Europe has been Mark Spanbroek for many years, a former VDM trader. In his position at Getco he usually had some strong opinions to share in the press. He retired a few months ago, and will head the European lobby group for HFT firms. Word is Spanbroek hasn’t always been very supportive with the market maker association APT in talks with the Dutch government – but clearly the former difficulties have been set aside. Apart from the four founders, backing has been secured from a dozen other firms.
The lobby group is a sister organization of the US Washington-based FIA Principal Traders Association. Another lobby in Asia will probably be initiated as well. Main objectives for the lobby group will be to create a common view to Brussels and local regulators of proprietary trading activities. There is a lot of explanation work to do for FIA, as the avalanche of bad publicity is hard to tackle.
Update: Another Dutch touch in this story. Current IMC managing director Remco Lenterman (former Goldman Sachs, Kempen) will be chairman of the FIA ETPA, Quotenet reports (nl). Mark Spanbroek will be vice-chairman. Other three members of the board will be Dennis Dijkstra (CFO Flow Traders), Jennifer Boneham (Getco) and Hans Pieterse (Optiver). The current member list of companies can be found here. Tibra Trading hasn’t joined in yet. Maybe their FTD memory is preventing them.
first !
Jack, man, you have complained about that http://www.aptraders.nl/ before too, get over it ya, its deceased like lot of its deceased members .. nobody updates it since everybody has either died or move on ..
the e.u is fucked.
no its not, the banks will be rescued, PIG will be restructured in the interim and eventually they will quit or be kicked out .. core euro is fine, thanks vm,
How can Optiver lobby against a government that is suing them?
clearly you dont know how politics and bureaucracy work >!
Isnt it time to update aptraders.nl?
Ledenlijst Association of Proprietary Traders
• 323 Trading Amsterdam
• ABR Financial BV Amsterdam
• All Options B.V. Amsterdam
• Alphabay Capital B. V. Amsterdam
• Cross Options B.V. Amsterdam
• Damste Beheer B.V. , M.A. en J.H. Amsterdam
• Effective Traders Amsterdam BV Amsterdam
• Flow Traders Amsterdam
• IMC B.V. Amsterdam
• Klinkenberg Traders B.V. Amsterdam
• Market Wizards Group B.V. Amsterdam
• Nyenburgh Beheer B.V. Amsterdam
• Optiver VOF Amsterdam
• Saen Options B.V. Amsterdam
• Scrocca Option Trading B.V. Castricum
• Van der Moolen N.V. Amsterdam
instead of complainting, why dont you do it yourself ?
a small investor decides to buy some OTM calls at 0.03 (his broker is MIJNbroker, cheapest one in town)
investment: €360
transaction costs: €204
the stock goes up and he decides to sell at 0.06
return on investment: €720
transaction costs: €204
Gross profit: €360 100%
Net loss: €48-/- -13.3%
Totall transaction costs: €408
Basic conclusion: LOWER THOSE F#CKING costs!!
the exchange doesnt have a competing firm driving down those prices .. the small investor can suck the exchange’s big hairy balls ..
So long as market makers are quoting that 3 cent OTM option with a 50-100% spread, we will work on lowering the tick sizes and force you to narrow your spreads first. Then we’ll think about the transaction costs.
haha stupid exchange, doesnt know that lowering spreads is going to drive out few market makers and the remaining market makers are going to go back to quoting wide !
stupid exchange doesnt realise that there are lot of market makers .. so their spreads and prices are very competitive .. there is just one exchange, so there is exploitive high transaction cost as a result of monopoly ..
stupid exchange is stupid exchange and not a smart market maker ..
Can’t Optiver just whack or bully market to make money?
> The current member list of companies can be found here.
It took me an hour to login to that site so I figured i’d shoot a picture of the member list. http://goo.gl/xam8u
‘Can’t Optiver just whack or bully market to make money?’
the profits would be less than fines and legal cost, so its not worth it >>!
@4:01 pm -> bullshit.
Anyone really think that the typical foaming-at-the-mouth directional small investor cares about tick size & comms?
These compulsive punter morons are just leverage hunters.
They care about margin minimums .. only .. oh, and maybe free access to charts so they can play with moving averages..
In their minds, superior market timing will totally cover transaction costs.
Reducing the minimum tick only punishes MMs, and marginally helps some fund managers miss their lame index tracking targets by a little less.
Response to: anonymous (June 9th, 2011 at 1:34 pm)
If you trade such small cotract it might be an idea to buy leveraged products orientated at retail investors:
* Plain vanilla warrants (closest to options) or simply Turbos/Sprinters
Total transaction cost for your deal should be around 16 EUR depending on the broker.
‘Anyone really think that the typical foaming-at-the-mouth directional small investor cares about tick size & comms?’
i do hope they are not as stupid as you can describe them to be !
‘Reducing the minimum tick only punishes MMs’
Its a free capitalist economy, if you dont like the punishment, you can quite the game and go do something more mellow, nobody will miss you,
‘If you trade such small cotract it might be an idea to buy leveraged products orientated at retail investors:’
if you are such small player, you should stop wasting time in financial markets, how can you expect to make money from high-speed getcos and front running goldmans of the world,
if you like gambling, can i suggest casinos, their dealer have all night liquidity .. so that you can loose all your money in one sitting ; )
@ 5:56 pm
Dude .. excited retail punter morons are necessary for MMs to survive.
This is not an altruistic nor economically productive game.
At it’s core, it’s largely MM casino dealer vs uninformed directional punter.
They “have that lucky feeling”, and I / we facilitate their positioning.
Hey retail, bend over anytime..
thats what i hope they do realise .. that they are getting fucked over by getcos and goldmans .. rather than blaming rich people or watever they should look at what they are doing wrong to themselves .. buying derivatives when you have no idea about the underlying .. unbelievable ..
… or simply Turbos/Sprinters.
like sprinters don’t have a marketmaker?!
just one MM for Christ sake, the f#cking bank itself!
and their spread is way higher + the guy responsible to put some prices on the screen is not at home markets inend to get more volatile / when the shit hits the van.
Same mentality as the moron who chases the “hot” slot machine.
They think they have a system, but actually they just misunderstand the game.
Then they get mad when things don’t go their way…
“It’s not fair. Why don’t I get a bail out! Goldman is an evil empire!” etc..
Irrespective of tick size & comms, punters will punt .. that’s just what they do.
Got that lucky feeling?
does anyone know who has joined rob keldoulis’ new firm from optiver?
i thought rob had moved to campari, is he starting a new firm ??!
I’m clearly out of the loop. Never heard of Campari (apart from the alcoholic beverage), so why is Keldoulis working there, and why should I give any credence to the rumour that he is?
i heard frangelico capital is the shit
I heard Dowson and a few other traders(some whom have sat out their NDA’s and some not) have joined this new firm started by Rob
lol, wannabe bhandaris/tibra .. nice .. just as bhandari moved on from the game .. some losers jump in .. what a timing ..
so rob was leading the charge against tibra since optiver felt that they stole their code .. now optiver might be tempted to think rob stole the code too, given dowson’s reputation n all .. so who in optiver now going to lead the charges against Tibra and Rob’s new company ..
sounds like rob is ready to put his billion to use and shut up the doubters and haters
i heard rob was the second largest shareholder in glencore, and now glencore are going to sue him too
“like sprinters don’t have a marketmaker?!
just one MM for Christ sake, the f#cking bank itself!”
Yes indeed one MM does make it riskier (more costly) on the spread side, but you can’t possibly argue that the total transaction cost of 408 EUR on options for small investors (see intial comment on June 9th, 2011 at 1:34 pm ) is smaller than the cost the guy is going to have on a plain vanilla warrant or Turbo.
Small investor always get screwed, however the brokerage fees on options are a costlier screw than the MM spread on plain vanilla warrants or Turbo’s
brokerage fee is costlier screw than MM screw simply because they are lot of MM competing whereas Euronext Amsterdam exchange is monopoly .. monopoly pricing !
@ Amsterdam exchange is monopoly .. monopoly pricing !
hear hear!
WHO GIVES A FUCK IF ROB GETS SUED. HE WILL HIRE DREAM TEAM AKA OJ’S LAWYERS AND IF GLOVE DOES NOT FIT MUST ACQUIT!
IMC makes 51 mil net profit in 2010….. http://www.quotenet.nl/quote-500/megawinst-voor-beursbengels-rob-defares-en-wiet-pot-imc.php
all the IMC critics can shag each other now ..
If you don’t pay any bonus like IMC and fire the people who actually deserve one instead then of course you make a nice profit!
anyone can make a nice profit ….
lets see how long that business model will last!
How IMC makes big profits:
Senior Management: “hey trader T. can you step into our office? we need to talk about your bonus…..”
Trader T: “of course, will be right up!”
Senior Managementt: “Trader T. you have done excellent work for us and made good profits. Did you find time to train your junior assistant and teach him everything you know about how to make profits?”
Trader T: “yes I certainly did, just like you asked me!”
Senior Management: “thats great, drum roll please……your bonus is………… YOU’RE FIRED!!!”
CFTC vs Optiver has been referred to a magistrate for settlement, as of Wednesday. The final settlement figure can’t be far away!
‘Trader T: “yes I certainly did, just like you asked me!”
Senior Management: “thats great, drum roll please……your bonus is………… YOU’RE FIRED!!!”’
how come senior traders in IMC are so stupid .. why are they teaching their juniors and getting replaced !!
How IMC makes big profits:
Senior Management: “hey developer D. can you step into our office?”
No, wait, that never happens, because IMC’s edge is it’s traders. Developers are a commodity. Right?
aldus een frustrated developer…..
‘Developers are a commodity. Right?’
Since you sound like a developer, let me tell you how market works .. we look at demand and supply .. if the supply of developers are high, they are commodity .. if developer skills are not hard to teach/learn, they are commodity .. if developer cant really distinguish from other developers, they are commodity .. stop being an IT nerd and face to real world of how demand and supply works ..
and developers will undercut each other to zero.
News on the Optiver case;
http://www.reuters.com/article/2011/06/29/us-cftc-optiver-oil-manipulation-idUSTRE75S3LR20110629
Old news, Buster!
EU is bringing in a transaction tax, so all Dutch and UK market makers are doomed anyway.
Long live the US markets!
how much is the transaction tax? if its not too much, then it might not be complete end of it ..
‘http://www.reuters.com/article/2011/06/29/us-cftc-optiver-oil-manipulation-idUSTRE75S3LR20110629’
thanks for the link !
the CFTC in July 2008 charged Optiver with using a rapid-fire trading program to manipulate crude, gasoline and heating oil prices on the New York Mercantile Exchange.
Optiver reaped a $1 million profit in 2007 by “banging the close.” This is an illegal strategy …
FTT would be devastating for trading. Every DAX-future you trade will be charged with 91 euros. (7300 *25* 0.05%).
If you would trade 500 times the 6900 call now for 415 euros you would pay : 500 *5*415*0.05% = 519 euros of taxes
hedging with delta 90 means 90 futures. Taxes : 90 *91= 8200 euros.
This trade would totally cost more than 8700 euros!
Market Making will be dead….
The volume would absolutely tank, as end users decide the costs are too high to trade.
nobody will miss you, have a wonderful life,
Certainly the banks wouldnt miss the market makers. They will be able to apply their customary wide spreads to any markets, keeping things between themselves and clients once more.
‘ keeping things between themselves and clients once more.’
clients can take care of themselves .. just worry about yourself ..
[…] Market makers will be wiped off the map and tens of thousands will lose their job. The financial lobby will probably be in the trenches at this very […]