Euronext Liffe cuts some fees
24 Oct 2011
In a last effort to stay competitive, Euronext Liffe has cut transaction fees for clients and liquidity providers. A textbook example of too little, too late. It’s difficult not to be cynical.
On the other hand, after all these years running a business as a true monopolist it’s a giant leap for Euronext. It’s way too late to stop TOM from launching their derivatives exchange. The cut won’t make a difference, but at least they are doing something. Maybe discount brokers such as mijnbroker.nl will adjust their option fees immediately. What Euronext should have been doing is lowering the fees a lot more agressive for options with low premiums. That would possibly ignite trading in the weekly options or in small out of the money strikes.
Clients will pay 40 cent instead of 75 cent. The clearing fees aren’t included in this price. Liquidity providers with a quoting obligation (pmm and cmm) will pay 5 cent in equity options, down from 7 cents. Index options stay unchanged. This doesn’t mean the total transaction costs at the market makers will be lowered with 29%. First of all, options with premiums under 50 cent were charged 5 cent before. Second, the Central Counterparty Clearing (CCC) needs to be paid as well as the Clearing bank.
New prices will be effective from December 1st.
Update
Didn’t pay enough attention to the details of the press release. As people pointed out, the exchange has been raising prices too. Professional block trades between traders are getting more expensive. Smaller market makers not acting as liquidity provider got hit by the removal of the “preferential class” fee. Their fees will be doubled. You can raise some prices when selling a superior product. Transaction prices are more like a commodity. The quality of Euronext Liffe markets is mediocre at best.
TOM will push forward with low prof trade fees to attract market participants, and hit Euronext where it hurts. Euronext will scramble to cut more prices, and looking for other fields to raise fees – only to discover their former monopolist margins are history in a price war.
Source (pdf)
- Tags: Euronext
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42 Responses to Euronext Liffe cuts some fees
anonymous
October 24th, 2011 at 11:43 pm
Shame shame shame shame shame shame shame shame on you!
anonymous
October 25th, 2011 at 2:21 am
shame .. eh ?
Appearance of NYSE Euronext
October 25th, 2011 at 9:39 am
from 1978-2011:
http://www.google.nl/imgres?q=monopoly&um=1&hl=nl&sa=N&biw=1280&bih=868&tbm=isch&tbnid=EkdGKddstDg2OM:&imgrefurl=http://www.androidworld.nl/61490/deze-maand-android-release-van-monopoly-en-bejeweled-2/monopoly-logo/&docid=DoZcNVU9gWuH5M&imgurl=http://images.androidworld.nl/wp-content/uploads/monopoly-logo.png&w=1029&h=391&ei=3nSmTu-TI5C2tgfg6Pz3Dw&zoom=1&iact=hc&vpx=590&vpy=269&dur=6070&hovh=138&hovw=365&tx=190&ty=107&sig=101818295557829084140&page=8&tbnh=76&tbnw=201&start=158&ndsp=22&ved=1t:429,r:19,s:158
anonymous
October 25th, 2011 at 10:43 am
Euronext cuts fees??????
The small traders are faced with a raise on their fees >100%!! Due to the remove of the “preferential class” fee.
In this way Euronext makes it TOM very easy.
anonymous
October 25th, 2011 at 10:50 am
prof trades are getting more expensive too. Maximum price per trade is uncapped now..
anonymous
October 25th, 2011 at 1:18 pm
All traders will pay more fee
anonymous
October 25th, 2011 at 2:49 pm
no, LESS!
and the retail-investors even MORE LESS!!
anonymous
October 25th, 2011 at 3:30 pm
NOPE…Options <50cts get 1ct more expensive, Prof 4Xmore expensize and preferent classes dissapear.
anonymous
October 25th, 2011 at 4:51 pm
preferent classes are for calimero’s
anonymous
October 25th, 2011 at 4:53 pm
and Prof suckssssss for decades
anonymous
October 25th, 2011 at 9:31 pm
‘from 1978-2011:’
That monopoly gag directed at euronext is old and tiring, next,
anonymous
October 26th, 2011 at 8:07 am
Calimero traders take care of nice-tight markets. Theyquote “in-the-middle” and make sure that there are really better prices.
anonymous
October 26th, 2011 at 2:39 pm
Euronext in trouble again. AEX not calculated during expiration of daily AEX options..
anonymous
October 26th, 2011 at 2:55 pm
Euronext Liffe really deserves premium prices. High quality exchange.
anonymous
October 26th, 2011 at 3:47 pm
settlement 306,69
anonymous
October 26th, 2011 at 4:11 pm
Market thought differently..
anonymous
October 27th, 2011 at 2:58 am
‘Euronext in trouble again. AEX not calculated during expiration of daily AEX options..’
No its not, last time they were not able to calculate, they were able to establish the settlement price in another way .. as long as the approx correct price comes out, little bit of delay is quite okay ..
anonymous
October 31st, 2011 at 7:08 am
hé sappie,
mooi stukkie vanochtend in het fd.
“hendriks is bang dat er straks een oligopolie ontstaat met grote spelers”.
toen je vroeger zelf deel uitmaakte van ‘t daadwerkelijke oligopolie in (lange) Banken hoorden we je niet!
anonymous
October 31st, 2011 at 10:56 am
Sappie = right! Who needs Bloomberg to trade? Point is that E’next raises fee by more than 100% and at the same time communicates that they lower the fees!
Not only small parties are affected by this, also big parties who do not have a liquidity provider role are faced with much higher fees
anonymous
October 31st, 2011 at 11:10 am
Wrong … all big players act as liquidity providers. The 3-man shops like Klinkenberg are not “big”. You may think you can pick up chicks by telling them you are the CEO of GDT Capital, but realistically, you are not a big player in this industry. Or else Euronext wouldn’t trample you, would they? Back to working your 1 lot now.
anonymous
October 31st, 2011 at 11:57 am
All big players act as liquidity prioviders??? ING bank and RBS are big but don’t have pmm or cmm roles. They also gonna pay the higher fees.
anonymous
October 31st, 2011 at 12:19 pm
It’s a simple calculation: if you trade a lot (“you are big”) and your style of trading is market making (compare with Binck Bank’s execution only), your investment to be able to handle a role as pmm/cmm can be recouped by the lower fees (not to mention the extra capacity). So you should become a pmm/cmm. I’ll leave it to you to figure out which of these requirements were not fulfilled by Klinkenberg, GDT, RBS, ING etc.
anonymous
November 1st, 2011 at 12:46 am
Nice 55bn euro jackpot,
http://www.bbc.co.uk/news/business-15503097
anonymous
November 1st, 2011 at 12:49 am
‘You may think you can pick up chicks by telling them you are the CEO of GDT Capital,’
Chicks in Holland don’t get picked up with your small dick, big money attitude,
anonymous
November 1st, 2011 at 12:49 am
‘Who needs Bloomberg to trade?’
Only OTC is done through BBG,
anonymous
November 1st, 2011 at 12:50 am
‘your investment to be able to handle a role as pmm/cmm can be recouped by the lower fees (not to mention the extra capacity). So you should become a pmm/cmm.’
Lol, open a new trading company and find out for yourself how easy it is to become pmm/cmm,
anonymous
November 1st, 2011 at 12:52 am
‘Buddy, if you’re making less than 25k a year you should have tried your luck elsewhere! ’
Havent you played poker, just because he says something doesn’t necessarily mean that he actually meant it, he’s just protesting because he’s liable to pay 25k more, even if you are lot more profitable, you still don’t wanna pay 25k, its hard earned money for a small scale operation,
anonymous
November 1st, 2011 at 12:08 pm
@ 12:50am
Plenty of open spots (PMM & CMM) last time I checked, including the AEX Index. I guess one need only look at a relatively new start-up like Caerus and you will realize that yes indeed it is rather simple.
http://www.euronext.com/editorial/wide/editorial-3090-EN.html
CEO
November 1st, 2011 at 12:22 pm
“Chicks in Holland don’t get picked up with your small dick, big money attitude”
Thanks for trying all the same and being man enough to admit your failure.
en wanneer worden de opties verlaagd?
November 1st, 2011 at 3:48 pm
Beste klant,
Goed nieuws. Vanaf vandaag verlaagt Binck de transactietarieven voor ING Sprinters. Vanaf nu handelt u voor € 5,50 + 0,06% per transactie, met een minimum van € 10.
Heeft u nog vragen of suggesties?
Neemt u dan gerust contact op met de Klantenservice & Orderdesk via 020 – 606 26 66. U kunt ook een e-mail sturen naar klantenservice@binck.nl.
Met vriendelijke groet,
BinckBank
anonymous
November 2nd, 2011 at 3:09 am
‘I guess one need only look at a relatively new start-up like Caerus and you will realize that yes indeed it is rather simple. ’
Buddy, I said open a new trading company and find out for yourself how easy it is to become pmm/cmm, not just show some other person who did it.. I can show you Bill Gates, can you make 50bn bucks, indeed it is rather simple ?
Quote 500
November 2nd, 2011 at 7:52 am
@3:09
Ah, Caerus is the new Microsoft? Thanks, I’ll add them to my list.
royal flush
November 2nd, 2011 at 11:03 pm
3:09 am
you again … sigh.
the cearus guys left vdm in the summer of 2009 … set up a new company, bought the software off the shelf, got the euronext membership, signed up to be market maker, by the end of the year they were up and running. these days it’s straightforward and simple (as i have already found out myself thank you very much). go and read the newspaper article again. it mentions minute companies of two or three persons (regularly) acting as cmm e.g. gdta. so unless their names are gates and allen, i’m inclined to say that’s a clear indication it is not a huge feat to set up a trading firm and become cmm. if you are all alone, it could be tricky to stay cmm (you won’t be able to go away on holiday), but becoming cmm, euronext is happy to accept you.
this is not to say those small companies will be hugely successful, as in “$ 50 billion profits”. as such, your comparison with microsoft is plain stupid and entirely besides the point. but you often tend to change the subject when your stupidity has been demonstrated (like the other day with your dispersion nonsense).
as for poker. wtf? you sound like one of those idiots from susquehanna. certainly fits the other traits you display. anyway, more likely than not, the 25k in extra fees was exaggerated to begin with (if they had known about “bluffing” as it’s called in poker, they would have jacked up the extra costs and created a better argument instead of making themselves look stupid). in any event, one can then easily calculate the numbers of contracts those locals trade: a little over 1,000 per day (on average). that’s right, three zeros, not a typo. ouch! so much for the suggestions on this blog and in the newspaper that those locals add a lot of liquidity and keep optiver’s prices competitive. delusions of grandeur. go ahead and click the thumbs down button – you know i’m right though.
anonymous
November 2nd, 2011 at 11:44 pm
‘Thanks, I’ll add them to my list.’
What list? The list you have in your little pink ‘Burn Book’?
anonymous
November 2nd, 2011 at 11:56 pm
‘so unless their names are gates and allen, i’m inclined to say that’s a clear indication it is not a huge feat to set up a trading firm and become cmm’
kindly read the original statement, ‘open a new trading company and find out for yourself how easy it is to become pmm/cmm,’ .. how does that statement imply its a huge feat, its just not straightforward and easy,
anonymous
November 3rd, 2011 at 12:17 am
Jack, kun je die ene gast die het hele blog vol spamt niet bannen? 10 onzin posts op rij, allemachtig zeg!
anonymous
November 3rd, 2011 at 12:19 am
Ha ha, hij heeft zichzelf zojuist een thumbs up geven voor alle posts.
PMM
November 3rd, 2011 at 12:27 am
If being pmm/cmm is difficult, Euronext is 100% right in giving us better fees. We are essential to the success of Euronext derivatives trading not those small firms. Stop crying!
anonymous
November 4th, 2011 at 9:33 am
Anyone know what’s happening with CFTC vs Optiver?
kleine local
November 24th, 2011 at 9:45 pm
http://fd.nl/beleggen/997910-1111/tom-begint-prijzenoorlog-met-euronext
anonymous
November 25th, 2011 at 5:46 am
> The online broker for private investors is still not going to cost savings to customers through it. € 2.90 BinckBank charges to customers for trading a optieconract.
So the cost saving doesn’t go to customer, what’s their incentive to get executed on TOM ? Can they get one tick better execution on Euronext ?
No more bullying of small market makers - amsterdamtrader
December 19th, 2011 at 7:02 pm
[...] preferential class fee scheme for market makers has been removed from the price list as of December 1st, and the fees for market makers without liquidity provider [...]