16 Jul

Working in a fun environment at IMC

Gezellig man! Every once and a while mails arrive asking for advice for getting a job in the trading industry. Well, I’ve found the perfect job for getting a foot between the door at one of the major trading firms from Amsterdam, IMC.

Hat tip to the comments, would have missed this golden opportunity. If it wasn’t for my lack of Linux knowledge, I would’ve applied myself.

The advertisement raised some eyebrows and the firm has pulled the advertisement from the internet. Fine, but google cache is our friend.

This is one of the most bizarre jobs I have seen from the trading industry in a long time. Working in an “isolated environment” in a graveyard shift from 01:00 am to 8:30 am doesn’t make sense, in normal circumstances. IMC has offices in other time zones (Chicago, Sydney, Hong Kong) so all employees can sleep at night.

The main benefit of Zug in the financial world is the low tax rate in this dull part of Switzerland. Hence many trading firms have an office in Zug. All Options once tried opening a branch in the Caribbean, in the Netherlands Antilles. Sounds a lot better. Routing profits to the lowest tax entities is a common hobby.

But seriously. Hiring someone with social issues as a “night shift trader” – this can’t be true. There is no economic rationale for that apart from tax issues, it’s not like a hospital or a police department. But the advertisement was really there.

Night Shift Trader

IMC financial markets is one of Europe’s leading proprietary trading firms. IMC Zug specializes in automated trading of futures, stocks and FX spot rates on a high frequency scale. We are constantly pushing what is technologically possible and innovating to stay ahead of the competition.

For our Office in Zug we are currently looking for a Trader to work night shift from 1.00 am to 8.30 am.

In this position, you will learn how to operate our trading systems and monitor P&L. You will face both trading and technical challenges in a distributed and complex trading environment. Your primary responsibilities will be:

Duties include but are not limited to:

  • Starting and monitoring trading strategies as well as the reporting system
  • Handling alerts and performing checks on the trading infrastructure as well as fixing basic technical issues
  • Reacting according to predefined procedures in case of special events that are not handled automatically by the system
  • Contacting responsible person in case risk or P&L triggers are breached
  • Ensuring that automated daily reports have been generated by the start of the day shift and debugging in case of technical problems
  • Communicating events experienced during the shift to the rest of the trading team

Required knowledge and skills:

  • Technical degree is a must
  • Strong IT skills, experience with Linux is a must
  • Fluency in English
  • Strong troubleshooting skills
  • Highly reliable, trustworthy
  • Interest in financial markets, but no prior knowledge or experience required
  • Advantageous but not required: Familiarity with MATLAB and experience with Linux command line tools

Success factors:

  • Must be able to work productively under no supervision and in an isolated environment (be very lonely)
  • Having a sense of urgency as well as understanding priorities at various levels is paramount to the success
  • Flexible, proactive, hands-on mentality, able to work independently (be very lonely)
  • Strong written communication skills are vital to the success at this position (written skills, as you’ll be having nobody to talk to)

What we offer:

  • Work within a dynamic, international as well as continuously improving environment
  • Contact with a team of highly experienced, skilled and well-rounded traders who are always looking for the more efficient solutions (you can sometimes have a meet and greet session with this team of traders, but you are a one-man-team)
  • A fun environment – it is not only business (I have better alternatives for fun during the night shift. I sleep.)
  • Work with the latest and the greatest technologies (I prefer my oldskool bed)
  • Competitive salary, excellent working conditions and numerous perks (excellent working conditions, the whole office for you. Free coffee)

Are you looking for a position that is intellectually challenging? Would you want to work in an international and multicultural (whut?) environment? Then please apply directly to this position on our website www.imc.nl

 Alas, the job offering is gone. But you can always give it a try. And when you’re bored at night, copy all trading algo’s on your USB and sell it to, well, Tibra?

390 thoughts on “Working in a fun environment at IMC

  1. the incompetence of IMC yes-men is something unmatched in the industry, luckily they are not in a client business… They should ask this night-shift trader with strong written communication skills to write the next job posting…

  2. ‘This is one of the most bizarre jobs I have seen from the trading industry in a long time.’

    well then Jack you haven’t been unemployed, try being unemployed for sometime and you’ll see all kinds of job opportunities coming up, IMC role was nothing out of ordinary,

  3. “IMC role was nothing out of ordinary,”

    do not defend the indefensible, nobody ever saw a job description like this in the trading industry,

  4. again, are you guys high or what, while it might not have been norm in past year, but night jobs have come up time and again going back in history,

  5. yes, that’s true. But what about night jobs in a fun environment (i.e. an empty office at night) which offer (written ?) contact to a team of highly experienced traders? You will not find such a night job neither in the past nor in the future, because…. it cannot exist!

  6. Some guys were evening traders at IMC, doing gamma hedging from Amsterdam in the US and they have flourished now

  7. “anonymous
    July 17th, 2012 at 6:25 am
    Some guys were evening traders at IMC, doing gamma hedging from Amsterdam in the US and they have flourished now”

    That is a rational job. Working from 18:00 till 22:00. Trading Dutch stocks in the US (ADR’s). Some sort of student job. And that isn’t a graveyard shift..

  8. yeah, but it’s not a late shit job but a night shit job. FX trades 24×7. now that hk and syd aren’t there anymore, they shift operations?

  9. you still did not understand the meaning of this job posting. It is NOT about night shifts. It is about MISLEADING and DEFRAUDING employees, it is the result of incompetent managers at best and intentional manipulation and exploitation at worst. How do you think a newly hired night shift trader would feel given the description of the job (intellectual challenge, matlab & Linux skills, interaction with top traders, fun environment, etc.) when he/she realizes that it was just a cheat? This job posting clearly shows that IMC management does not care a shit about their employees, that IMC lies publicly about the employment opportunities. Employees will understand that they are treated like slaves, without any respect or sense or responsibility and honesty towards them, perhaps this is the VOC mentality, but they will pay the same coin back by posting on this blog and …

  10. ‘You will not find such a night job neither in the past nor in the future, because…. it cannot exist!’

    wow,
    really,
    very insightful,

  11. you guys just suck – losers all over moaning about things they don’t understand. doing 24×5 shift in one location compared to doing it over various locations brings you one big advantage – full control. go back to management for dummies lesson 1

  12. Pingback: FT Alphaville » Further reading

  13. ‘go back to management for dummies lesson 1′

    yes, for a manager it can make sense to organize some night traders, as long as he does not have to do it who cares…

  14. ‘http://ftalphaville.ft.com/blog/2012/07/19/1089221/further-reading-1065/’

    god damn, amsterdam trader made it to FT, well Jack, how about a bottle of champagne and less censorship in future,

  15. that’s not a bad article, if people write such a bad job description what do you expect?

  16. Most posters here seem to be either a bunch of disgruntled employees or opinionated, junior traders in their first jobs with no idea about general business practices. Get a life people.

  17. you seem to have lot of idea about general business practices, care to share some, or would that be too much of interruption in ‘having a life’ at the same time,

  18. it used to me fun some years ago, there were really good senior managers around, but the best decided to leave or had to leave (because not 101% yes man) and since then the situation degenerated. Today people stay at IMC only for the money,

  19. ok, but then let’s not call it a “fun environment”, let’s call IMC a “rich environment” to attract talented people

  20. ‘Today people stay at IMC only for the money,’

    so what’s the problem, they are getting paid aren’t they, if they don’t like it they can leave pls,

  21. ‘ok, but then let’s not call it a “fun environment”, let’s call IMC a “rich environment” to attract talented people’

    of course it ain’t fun, that’s just the HR euhpemism pitch etc, you guys are all high reading the job pitch on its face of it, a job means team, boss, prospects, money, learning, so much, the job spec is just indicative of some of it to some extent,

  22. “so what’s the problem, they are getting paid aren’t they”

    the problem is pay is not fair and does not reflect the real contribution, if you are a selected yes man, like all senior managers, you are largely OVERPAID, otherwise you are UNDERPAID

  23. the fact of cashing in big bonuses just for saying yes, even if you are a half-wit, is simply disgusting,

  24. ‘the fact of cashing in big bonuses just for saying yes, even if you are a half-wit, is simply disgusting,’

    that’s life for you, and again, how old are you?

  25. it’s not a matter if life being fair or not, it is a matter of rewarding people for their achievements, like for instance it is done in communism,

  26. ‘the fact of cashing in big bonuses just for saying yes, even if you are a half-wit, is simply disgusting,’

    what do you think every junior employee is going to make millions? Current managers have been appointed after a long track record of major achievements and are going to be compensated above average, that’s normal in every industry. Stop to complain and go to work.

  27. The quality of the blog has really taken a nosedive in recent months, in large part due to one troller who accounts for what seems like 85% of all postings and shares his “wisdom” on every topic and response. I’m talking about the “yah”guy who ends his sentences with a comma,

  28. ‘it is a matter of rewarding people for their achievements,’

    Get real, it’s not, achievement in the industry is still very subjective, even with a trading book having a PnL on it

  29. ‘Current managers have been appointed after a long track record of major achievements and are going to be compensated above average, that’s normal in every industry. Stop to complain and go to work.’

    This guy has been drinking his own cool-aid for so long, he actually believes his own hype, stop talking on down on your slaves and go back to saying yes to your managers.

  30. The problem with IMC is the utter lack of communication from the top. They say people are valued and that we are a non BS company. But that is not reality. Reality does not match management BS.

  31. They always say people are valued and that they are a non-BS company. Have you ever heard a company say that employees are not-valued and that the company is full of BS, seriously how old are you?

  32. actually I never heard about such a company, but does it mean that HR cannot be taking seriously?

  33. ‘does it mean that HR cannot be taking seriously?’

    No. I recall there was head of HR who had recently been hired, he actually tried to use his head in directing company’s hiring policies, as you could expect, management soon managed him out of the company, poor bastard.

  34. It doesn’t matter, the case was years ago, the lesson is still as relevant, say Yes to management above.

  35. I particularly liked the part “Reacting according to predefined procedures” and “Contacting responsible person in case risk or P&L triggers are breached” – meaning, are you junior enough to be a plain drone?

  36. Does anybody know how much money Kemp/Nino lost today on the dividendcut in KPN?
    Apparently they bought quite some conversions on the €8 (non-)bid of Carlos Slim –
    – must have cost some as well

  37. so you saying, Nino brought conversions thinking the implied dividend was low and the actual dividend forecast cut of 61% yesterday was lot lower than implied, how much was implied before the cut?

    what has low implied dividend got to do with American Movil’s creeping stake in KPN?

  38. what is dick size got to do with the price you have to pay for property?

    And if they have more money, why can’t they buy other similar properties for attractive price rather than a property for which they are being over-charged?

  39. Market Makers are all bunch of jokers by definition, if they were not, they would not be market maker. Think about it, staying behind (too many but it looks smart) screens and understanding shit about what’s going on but still pretending to have a clue. Think about the essence of that job. People/Company who succeed in it are actually not focusing on the lame market making activities. I’m glad to be in one of those very very few firms and watching the others collapsing.

  40. ‘staying behind (too many but it looks smart) screens’

    if you have to quote bloody 200 option series, while having market data, news, email, excel, matlab et al, having few extra screens wouldn’t hurt.

    ‘understanding shit about what’s going on’

    what’s going on that market makers don’t understand?

    ‘People/Company who succeed in it are actually not focusing on the lame market making activities.’

    there are plenty who try market taking and fail pretty regularly, so it’s not sure win there either.

    ‘watching the others collapsing’

    if anything, market takers are collapsing more than any one else, risk taking is completely out in this environment.

  41. Interesting, what would you do without mm. Do you quote for others? Sure you do. What a lot of bs on this forum. Be glad with mm’s, they give a hell of a lot people the chance to get in and out.

  42. all right man, get in, pay the spread, again pay the spread, get out, what a hell of a chance,

  43. this blog is called AmsterdamTRADER. can all the bankers go out and start their own forum?
    on your own bankers forum you could discuss more ways how to rip off your clients, how to manipulate libor and how to ask for more money from governments.

  44. HR group in IMC is sad. They have like 20 or 25 people globally. Not sure what they do other than sleep around with the partners. This job has HR all over it. Great job there JW.

  45. what else do you expect from HR? at the end it’s just administration and paying salaries,

  46. Pingback: Ça charrie sec sur les forums! | Trading HF pour les journalistes

  47. the SA team is only located in ZUG and there is no one operating in the Asian office down since the closure of the HK.. they need some poor guys to do the shit in Asian time zone

  48. Getco has been firing all the non-client traders, now time to take over all-client market maker Knight?

  49. well if they are so successful, how come they aren’t hiring the night trader anymore, some of us were really interested.

  50. ‘Getco has been firing all the non-client traders’

    what a bullshit! Getco is still making plenty of money with prop trading, not so much as last year but definitely good money, they just fired redundant traders with little contribution. The try to differentiate their business to also have some client activities, but this is a long term goal pursued by the new CEO, they are not making any relevant money from clients right now. Getco continues to be the leading prop trading company in equities.

  51. all right okay buddy, Getco is a leading company, calm down now. what’s the split these days there for prop vs client traders?

  52. Getco’s client business is basically generating only costs at the moment, competition is though and the buy side is not so keen to send their flow to a prop trading company for obvious reasons, all is payed by the prop trading revenues at the moment that’s why they have to focus on reducing costs in the prop trading business and fire redundant traders.

  53. Which firms made that 440 million from knight? IMC? SIG? Flow? Getco? citadel? SUn? Any rumors?

  54. ‘jump made a killing apparently’

    with 440mil to go around, lot of people would have made killing apparently.

  55. that doesn’t mean other firms made 440m. knight lost quite a bit in trading out of the positions well beyond the timespan that (other) hft’s and mm’s would typically keep their positions. their combined profits are most likely in the range of 100m, in line with original analyst expectations of knight’s losses. not bad for a day’s work, but nowhere near knight’s reported losses.

  56. “who is Vertu?”

    The correct question is: who is Webb Traders and why haven’t I heard of them if they are so big???

  57. ‘The correct question is: who is Webb Traders ‘

    No, the right question is: is Webb Traders a fun environment, like IMC?

  58. ‘Knight’s screw up is related to the whizz bang new nyse retail liquidity program, no?’

    that’s the story easy to buy/sell, but it doesn’t seem that was the underlying issue.

  59. ‘knight lost quite a bit in trading out of the positions well beyond the timespan that (other) hft’s and mm’s would typically keep their positions.’

    so you are saying that intraday losses were 100mil, and the overnight portfolio dropped another 340mil being traded out, if that is indeed the case then there has to be some really large overnight long positions being hacked out on Thursday lows? That would be good for long buyers who came in those massive downticks and not necessarily hedge fund/mm.

  60. i didn’t say that. knight wasn’t flat by the end of their 45 minutes of mayhem. not by a long shot. as you can imagine, it cost them considerably more time to close their positions in a somewhat orderly manner. their ceo has confirmed so much in one of his interviews. the general market moved up considerably during the rest of the session. that didn’t help them. by the end of Wednesday they were looking at the 440m loss. overnight gaps had nothing to do with this (they reported their loss pre-opening remember?). but other hft/mm typically would not keep their (individually smaller) open positions for as long as knight needed. they call it *high* frequency trading for a reason ya know. hence their aggregate profits are not as large as knight’s losses. for anyone to suggest that other hft/mm must have made as much as knight lost (or any time some company takes a major hit, eg JPM whale or the facebook ipo) is simply ludicrous. last time i checked, there were more market participants.

  61. so you are saying 440mil was dropped intra-day and those profits went to day traders including mm/high-freq and potentially buy side who had either limit orders or more appetite to quickly deploy capital at ridiculous prices?

    how much capital can all the high frequency/mm combined deploy intra-day, enough to scalp 440mil or is that too big for them?

  62. the amount of capital is perhaps not too relevant if the frequency of trades is large enough

  63. okay, let me repharse, how much open delta can all the high frequency/mm combined take exposure to intra-day, especially when all of those positions are held on other side by just one group –  Knight Capital, enough to scalp 440mil off Knight or is that too big for rest of the prof mm/high-freq against Knight?

  64. you seem to see this as one big trade, but is is not, that’s why you do not have a big open delta, the 440 mil are the result of a lot (millions) of small trades, possibly alternating side so that the total delta stays small. A part from this it is of course not possible to come up with an exact capital usage figure, but one can claim that it is very small

  65. why would i think it’s a big trade, clearly from 9:35 onwards market including Knight knew Knight fucked up, but it went on for another half an hour with no kill switch being used, some of those 140 names got out of whack significantly including erroneous/more than 30% move.

    your claim that all the high freq/mm didn’t get on the other side during that half an hour and only managed to squeeze only 100 mil off 440mil losses sounds like made up guesswork to justify your initial thoughts.

  66. no one claimed that “all the high freq/mm didn’t get on the other side during that half hour”. you should learn to read before you type. it was argued that it is extremely unlikely that hft/mm were on the other side of EVERY knight trade (both when the algo went wild and when knight closed their positions). consequently, the notion that however much money was lost by one firm (knight) was a profit for hft/mm is plain silly. it seems you have little notion of what hft entails altogether for otherwise you’d understand that most of such algos are not designed to let positions run for a couple of hours. the h stands for high. the f for frequency.

    the knight ceo has gone on the record in stating that they were trading out of their positions throughout the rest of the day. since you are too stupid to understand what that means, i’ll translate it for you. long AFTER the 45 minutes of mayhem, and long AFTER the typical holding period of hft/mm’s, knight still had significant risk on their books (which may well have added to their total loss). because knight and many of their counterparties closed their respective positions at clearly distinct points in time (and thus not against each other), once more it’s bs to suggest that every dollar lost by knight was a profit for its counterparties.

    if youre still struggling to comprehend, read some of the reports on the internet. youll see various where it is speculated (sic) that the knight snafu occured because a test algo of theirs was accidently (and at first unbeknownst to knight) let loose on the live market. i don’t know if that is true, it is as i stated speculation. it would explain however why their algo was able to go berserk for so long. it would also mean that knight had a very large position on their hands by the time the algo was finally killed, one that they could only start to trade out of after hft’s would already have flattened their positions. so again, their gain is not knight’s loss.

    you sound like one of those stupid it persons who has no clue about trading but thinks he does. yet in reality he’s never made a penny. the kind who would test in a production environment for SIZE. honestly, if you were somewhat familiar with automated trading, you’d understand all of this stuff. and if you were at all familiar with intraday trading you wouldn’t be asking your stupid questions about “the combined open delta.” f’ing troll!

  67. ‘it was argued that it is extremely unlikely that hft/mm were on the other side of EVERY knight trade’

    why is it unlikely, who else was getting on the other side of those trades? and don’t worry about ‘EVERY’, talk majority.

    ‘both when the algo went wild and when knight closed their positions’

    we are only concerned about out of whack prices when algo went wild, not the market prices when the positions were closed, for all your expertise, is this not obvious?

    ‘consequently, the notion that however much money was lost by one firm (knight) was a profit for hft/mm is plain silly. ‘

    no it’s not, now stop being silly yourself.

    ‘hft entails altogether for otherwise you’d understand that most of such algos are not designed to let positions run for a couple of hours. the h stands for high. the f for frequency. ‘

    yes we are not discussing what hft stands for, you need to start listening to what is being said, the question is who had opposing positions when those out of whack prices were printed, did the buy-side have so many resting limit orders?

    ‘long AFTER the typical holding period of hft/mm’s,’

    you are being naive if you don’t realise the holding periods can easily be adjusted if there is obvious money on table.

    ‘once more it’s bs to suggest that every dollar lost by knight was a profit for its counterparties. ‘

    again, it’s not the question about ‘every’, it’s about large majority, 100 off 440 is just a number out of your ass.

    ‘one that they could only start to trade out of after hft’s would already have flattened their positions’

    this is your problem, you are firmly stuck with this assumption up your arsehole, go get a colonoscopy. if hft/mm got the large majorty incorrect prints from 9:30 to 10:00, the prices quickly mean reverted, so it doesn’t matter if knight brought back from the same counterparty for the rest of the day or how soon hft/mm flattened the obvious correct deltas. if they had large opposing position to knight and it takes knight all day long to unwind, there is no reason to assume hft/mm have to be flat 10:15.

    ‘if you were somewhat familiar with automated trading,’

    get out of your bubble and come out to real world, you haven’t figured out nothing.

  68. calm down guys, both of you have arguments but it is impossible to know the truth without collecting the hard facts and insults do not help to get any additional insight. Most likely the 440 did not all go to HFT companies, because even the most trivial market maker would have made some gains according to results published here:

    http://www.zerohedge.com/news/what-happens-when-hft-algo-goes-totally-berserk-and-serves-knight-capital-bill

    Knight was just buying at the ask and selling at the bid, loosing the spread x times even if there was no substantial price change. In other words, even a low frequency market maker could have made money in this scenario. But we do not know all detail of the trades so we cannot make any concrete conclusions, but only speculations. So I assume that if the pattern mentioned in the above link covers the majority of the trades there is no reason to believe that only high frequency traders were on the other side of the trades. The loss of Knight might therefore be spread among a large number of players which each had very little risk (i.e. delta) in being the counter party.

  69. ‘insults do not help to get any additional insight’

    insults are often resorted to when the other person doesn’t agree, it’s just easier to assume one of two is wrong and be humble enough that it could easily be you, in case it hasn’t been noticed, this is a very humbling business.

    ‘But we do not know all detail of the trades so we cannot make any concrete conclusions, but only speculations’

    apparently the moron on the other side is sticking with 100 of 440 out of his arse, and for some reason wants to attribute this to ‘hft’ strategy which were flat at 10:30!

  70. No, it’s not “a fucking virus”.
    First post I do in years on this website, I just remembered why I stopped.

  71. http://www.reuters.com/article/2012/08/09/us-knightcapital-stockinventory-idUSBRE87804L20120809

    WSJ and Reuters are reporting a 7 billion dollar outright position for Knight Capital Trading that they couldn’t easily get out of. Most HFT’s that I know would be shitting their pants with only a fraction of such a position. Letting it run for hours wouldn’t even cross their minds when normally they earn fractions of a basis point and rebates.

    And as for the stocks where prices were really ‘out of whack’ (such as the busted trades), those are the kind of movements that occur when liquidity is very poor after HFT’s and MM’s have stepped out (meaning they wouldn’t be on the other side of the trades). Remember the 2010 flash crash and how empty the order books were once the HFT’s pulled out?

    HFT’s and MM’s will have made good money when Knight was alternating between bid and offer as 11:20 correctly observed. But on the larger moves and Knight’s subsequent losses in closing their large position I expect HFT’s to have benefited much less so. How much they made in total is anyone’s guess. But I concur that it’s probably closer to the hundred million that the other guy suggested than 10:55’s suggestion that HFT’s made 440 million. And 6:54 was knowledgeable about a large open position that Knight had trouble getting out of which is more than can be said about 10:55’s random speculation.

  72. what are you claiming glory for? I had already speculated the WSJ story right at the start of the discussion, go back and read ‘overnight portfolio dropped another 340mil being traded out,’

    you wanna give a round of applause back, punk.

  73. ‘Most HFT’s that I know would be shitting their pants with only a fraction of such a position.’

    of course, the point i was trying to get was who got those high prints, if the mm/high freq were not on the other side of the new 7bn long position, then it looks like buyside’s resting limit sell orders got executed at the expense of Knight.

    ‘such as the busted trades’

    those were beyond 30% moves, again, you keep getting distracted from the point, who did Knight buy 7bn stock from that morning’s first 45 min.

    ‘other guy suggested than 10:55′s suggestion that HFT’s made 440 million’

    where exactly do you see 10:55 suggesting 440mil for HFT, it’s more like asking how did you guess 100 off 440.

    ‘6:54 was knowledgeable about a large open position’

    9:33 had actually started the discussion with that, 6:54 and 10:55 came much later buddy.

  74. Blackstone Group LP, brokerages Stifel Nicolaus & Co. & TD Ameritrade Holding Corp., Stephens Inc., Jefferies Group Inc. and surprisingly Getco LLC, to the tune of 400mil.

  75. Why surprisingly? Getco is the only investor which makes 100% sense, as it wants to come closer to client business this is a golden opportunity. Not clear why brokers invested, perhaps because Knight buys flow from them and it is in their interest that this business will continue, as they do not have the skill to trade against retail flow.

  76. So you are saying if Getco wants to do client business, they should buy a small piece of another company which does that business? Isn’t Knight their own competitor now?

  77. ‘So you are saying if Getco wants to do client business, they should buy a small piece of another company which does that business? Isn’t Knight their own competitor now?’

    You got it! The easiest way is to buy a competitor, as a main shareholder Getco can have a lot of information on client flow and best practices there, this information can be used to improve their own offering or simply to “force” Knight to sent more flow to Getco at better conditions. This is actually the ideal scenario, for marketing reasons Getco will have much more troubles in getting retail flow than Knight. In conclusion Getco was extremely lucky, not only it made a lot of money due to the Knight loss, but it also has control of Knight now. In other words, Getco got a big piece of Knight for free (and by luck) to support its new business initiatives.

  78. how is it possible to ‘“force” Knight to sent more flow to Getco at better conditions’ if Getco is just a minority shareholder?

  79. well it is still a shareholder more than let’s say GS, obviously they can influence flow routing decisions

  80. this whole Knight story doesn’t settle in my mind somehow… from one day to another (a new patch ? not tested? possible, but difficult to believe) they start taking the market for minutes ( there are always, repeat, always, limit checks on the side of the exchange and on the company side. who deactivated them?) and nobody (no quant developer, no gui-watcher, no nobody) stops the bloody trader. on top of it, these obviously erroneous trades are not cancelled by the exchange….too many cannot be …. i think something else was going on inside the knight.

  81. ‘they can influence flow routing decisions’

    it seems less on direct side/direct flows and more on indirect side like idea sharing and acquiring competition that would be positive off the deal.

  82. ‘a new patch ? not tested? possible, but difficult to believe’

    it seems that the new system was to be parallel tested with existing system, but the new system went live without proper knowledge and so Knight didn’t knew that they were live with testing. It was only NYSE that cut-off the whole Knight off the exchange that the trading got ceased. so the kill switch was actually used by the exchange.

  83. ‘i think something else was going on inside the knight.’

    you think 911 was dubya’s planning?

    ‘stops the bloody trader’

    there’s actually no trader in this case.

    ‘obviously erroneous trades are not cancelled by the exchange’

    NYSE cancelled prints outside 30%, less than that is not within erroneous rules and so can’t cancel and cause losses and bad precedent for other market participants, how naive are you?

  84. you think 911 was dubya’s planning?
    ??? get some rest.

    there’s actually no trader in this case.
    algo = trader.

    talk about things you do know.

  85. it seems that the new system was to be parallel tested

    makes sense and it does answer a lot of questions. do you know how many names were affected? i didn’t track.

  86. ‘i think something else was going on inside the knight’

    ??? get some rest?

    ‘algo = trader’

    lol, let me guess, you never ever agree that you were wrong?

    ‘talk about things you do know.’

    why? Do you know everything about everything you talk about?

  87. Me thinks 7:16pm is right. Whilst it will always be speculation unless your in the room where the conduct took place or whether regulators choose to enforce and commence an investigation revealing those truths publically you will never know with certainity. But as 7:16 pm points out. It does not add up. Something else is going on.

    Amongst other factors, to me this is as a consequence of greater competition between HFT firms scrambling for the spread and that competition is driving increasingly questionable conduct often overlapping legal, borderline legal and illegal strategies. At best it is not in interests of the stability of broader financial markets and what markets were designed to do. HFT as a result of its influence has become more culturally ruthless morally questionable. Tibra vs Optiver was the tip of the iceberg and Knight Capital is the latest in a string of incidents highlighting this issue. This is a pattern.

    Depending on which data you use HFT accounts for around 70% of all trades by volume on the NYSE. Around 90% where there is some type of alogorithim used. There is to much speed, to much liquidty where the benefits have become questionable. Too much of a good thing and you get sick. The benefits HFT once proposed do not outweigh the risks to the system that it now creates. No investor seeks transaction speeds now sought by HFT market makers. Even dark pools where institutional investors attempted to avoid parasitic HFT are no longer immune. Its now HFT vs HFT. Computers vs computers. Spoofing, layering, wash trades and front running are all manipulating and distorting the market. HFT algos are even faking out other algos creating further distortions. No benefit to the system and the markets integrity is at stake. The threshold has now been crossed where it has become parasitic and needs to be regulated or there will be no market.

    Increasingly everyone is becoming more aware of how rigged the markets are and now day traders, and institutional investors are withdrawing. As a suggestion a 1/4 cent tax on every trade would solve most problems. The tax would have no effect on stock purchased for investment, but would crash all the computer driven casino activity overnight. It will restore true equity to productive investment rather then leveraged trading.

  88. ^ August 12th, 2012 at 5:25 am

    Haha, you sound really butthurt. Did you lose all your money this week?
    Crying for regulation like a sore loser, pathetic. Maybe you should take on a different profession? Albert Heijn kassamedewerker maybe? Oh wait, those are getting replaced by computers aswell.

  89. ‘Me thinks 7:16pm is right.’

    It’ll be hard to take seriously your rest of comments now.

    ‘It does not add up. Something else is going on.’

    No nothing else is going on, the parallel system to be tested and going live without proper knowledge sounds like what actually happened. Do you also think that Neil didn’t take the giant step for mankind?

    ‘driving increasingly questionable conduct often overlapping legal, borderline legal and illegal strategies’

    in journalism, this is called sensationalism

    ‘what markets were designed to do.’

    what are markets designed to do?

    ‘This is a pattern.’

    What pattern?

    ‘outweigh the risks to the system that it now creates’

    what risks?

    ‘No investor seeks transaction speeds’

    some buyside market takers like it actually.

    ‘As a suggestion a 1/4 cent tax on every trade would solve most problems.’

    UK actually has 0.50% stamp duty on stocks for the retail, for some odd reason hft/mm are exempt.

  90. You presume wrong. Just interested in the integrity of the markets and an intellectual discussion. It appears I am not going to get it with you. Cant say I understand your comment about that I sound “butthurt” can you explain?

  91. ‘what are markets designed to do?’

    where buyers and sellers meet – not where an intermediary harvests wealth out of the system for very little gains in so called liquidity

    What pattern?

    flash crash, knight capital, optiver vs tibra, Aleynikov (GS), Agrawa (SG), spoofing, layering, front running – computer code arms race influencing conduct that is distorting the integrity of the market and if not illegal are questionable

    what risks?

    market participants are withdrawing reducing volume, another flash crash, code following or faking other code; all create distortions

    ‘some buyside market takers like it actually’

    Yes correct ‘some’ – but that is a theme of my points not all and we are approaching thresholds of public and professional market participant perceptions where they are becoming disenfranchised with how the market operates. Its a market not a casino.

    ‘for some odd reason hft/mm are exempt’

    I could argue intense lobbying by deep pockets i.e FIA European Principal Traders Association. But there are many other factors

  92. to my opinion, exchange committee members should address the treatment of technical errors in production and testing env (Knight case).

    Some might be surprised, but often the difference is in a few lines of code. relatively small negligence, devastating consequences for the company, clear market effect.

    Negligence must be punished, but not deadly. What has happened to Knight may happen to any systematic trader. I think the community should rather use it as a warning and develop policies both inside the company, and at the exchange.

  93. ‘Just interested in the integrity of the markets and an intellectual discussion. It appears I am not going to get it with you.’

    If you were offering intellectual discussion, you’ll get something in return. one-way intellectual discussion is an oxymoron.

  94. ‘not where an intermediary harvests wealth out of the system for very little gains in so called liquidity’

    I agree, capped 10bps transaction tax would be good for the market.

    ‘flash crash, knight capital, optiver vs tibra, Aleynikov (GS), Agrawa (SG), spoofing, layering, front running – computer code arms race influencing conduct that is distorting the integrity of the market and if not illegal are questionable’

    you’ll have questionable conduct/bad seeds in all the businesses, doesn’t mean you close the whole business down.

    ‘market participants are withdrawing reducing volume, another flash crash, code following or faking other code; all create distortions’

    well if market participants are withdrawing, then that’s personal choice. reduced volumes is not necessarily indicative of poorly functioning capital markets. another flash crash would not occur due to circuit breakers. code following or faking is legit, look what samsung did to apple. distortions are integral part of markets, all bubbles, and we have had plenty, are essentially expected distortions given reflexivity; central banks can easily curb the bubbles by influencing credit expansion into the bubble, but instead we have all sorts of distraction emanating from capitol hill for fed.

  95. ‘exchange committee members’

    who are these ?

    ‘Negligence must be punished, but not deadly’

    yes knight dropped 440, got 400 infusions and existing shareholders got wiped, i think the system worked pretty well.

  96. ‘exchange committee members’

    these are the exchange members probably, who should have an interest in proper risk management measures

  97. ‘I think the community should rather use it as a warning and develop policies both inside the company, and at the exchange.’

    very good point, Knight the SEC should also make sure that there is a proper mechanism in place to learn from past errors

  98. I wanna say something. I’m gonna put it out there; if you like it, you can take it, if you don’t, send it right back. I want to be on you.

  99. How are you? You look awfully nice today. Maybe don’t wear a bra next time… No, I was talking to you. No, not her. I don’t know her name. What is it? Lanolin? Lanolin? Like sheep’s wool?

  100. What do you say if we go out on a date? Have some chicken, maybe some sex… You know, see what happens.

  101. Mmm. San Diego. Drink it in, it always goes down smooth. Discovered by the Germans in 1904, they named it San Diago, which of course in German means “a whale’s vagina”.

  102. I’m sorry, I was trying to impress you. I don’t know what it means. I’ll be honest, I don’t think anyone knows what it means anymore. Scholars maintain that the translation was lost hundreds of years ago.

  103. Ik heb een vraagje voor de market-makers onder jullie (al is dit niet echt relevant):

    Stel dat ik een “iron condor” wil verkopen

    a) heb ik dan de grootste kans om deze trade te krijgen als ik die “in zijn geheel” ingeef of is het beter om hem optie per optie in te geven?

    b) hoe zien jullie dit verschijnen op de computer?

    c) heeft het aantal contracten ook zijn invloed? Zo ja, hoeveel contracten zien MM het liefst komen?

  104. a) Always try to bundle option trades – you will have to sacrifice less margin
    b) As an Iron Condor.
    c) It depends on the market. In liquid markets such as AEX or ING any size will do. In small caps you will have more problems with size.

  105. I have a question for the market-makers among you (although this is not really relevant):

    Suppose I am a “iron condor” to sell

    a) I have the best chance to get this trade if I “in its entirety” ingeef or is it better for him to give option for each option?

    b) how you see it appear on the computer?

    c) the number of contracts also have influence? If so, how many contracts come up to see the MM?

  106. why are you looking to punt on options when you have extremely limited knowledge of options trading, are you too confident of your abilities or seeking a gambling high maybe?

  107. just because he asks these questions you think he’s got extremely limited knowledge of options trading? This is not the kind of questions that are answered by reading Hull.

    Apart from that, if only people with your level of knowledge op options trading would trade options, then the market makers would have a hard time making a living.

  108. Quote:
    “why are you looking to punt on options when you have extremely limited knowledge of options trading, are you too confident of your abilities or seeking a gambling high maybe?”

    I do not see how you can deduce my knowledge of options from my questions?

    I’m NOT a market maker and i don’t know many books that provides insight in the world of MM.

    But i’m willing to learn, that’s why i read books, blog and ask questions…

    If i may i want to ask one more question:
    – Are you market makers most of the time long or short volatility?
    – Is this different from equity or index options?
    – Do MM prefer to be long FOTM options or short?

    Thanks.

  109. For a good book about option trading that also provide insight in the world of market making read “Option trading” by Euan Sinclair. “Volatility trading” by the same author is also good, but more advanced.

    MM are more often long than short, especially FOTM puts (and in stocks also FOTM calls). There’s little upside in being short that stuff (unless they’re really overpriced).
    They’re more likely to be short those things that are easier to hedge, like ATM options. Index premium is easiest to hedge (very liquid market in the underlying, so hedging deltas in big moves is easier than in stocks), so if you’ve got an opinion about whether the general level of volatility is too high that’s the obvious place to go short.
    Apart from that some people do dispersion trading: selling premium in the index and buying it in all the stocks. Sometimes they do it the other way around, but that’s less common.
    This is what’s the preferred position. But whenever someone comes along and wants to pay good money for you to take the other side then every MM will be happy to take the opposite position.

  110. ‘just because he asks these questions you think he’s got extremely limited knowledge of options trading?’

    he is asking if he should buy the strategy as a whole or piece meal and if the number of contracts would make a difference, yes he sounds very knowledgeable about option trading.

  111. ‘if only people with your level of knowledge op options trading would trade options, then the market makers would have a hard time making a living.’

    Precisely, the rest of us are not in charity business of donating millions to market maker’s book, this poor bastard wouldn’t even realize what hit him even after wiping out his options book.

  112. ‘I do not see how you can deduce my knowledge of options from my questions?’

    Then you really don’t know what you are talking about when it comes to options trading.

    ‘i don’t know many books that provides insight in the world of MM.’

    Books can take you only so far, making money/practicality of hunting retail punters like you need hands-on desk experience, not just asking and reading off blogs. Have you applied at All Options, maybe they are looking for next set of fresh bright eager Juniors.

    – Are you market makers most of the time long or short volatility?
    Depends on the view, but usually the book is flat.

    – Is this different from equity or index options?
    index options are much more liquid, so the book is that much more flat.

    – Do MM prefer to be long FOTM options or short?
    there can’t be a preference, you dummy, if it’s ‘cheap’ you would want to be long, vice versa.

  113. ‘MM are more often long than short, especially FOTM puts (and in stocks also FOTM calls)’

    this brings to the black swan events, as a market maker you don’t want the option book to blow apart and the only way it can really happen is being short fotm options as a result of big gap/jump in asset price, hence.

  114. “Then you really don’t know what you are talking about when it comes to options trading.”

    => Ok, so if as a trader (not MM) you ever wonder if you gets te best execution legging an iron condor as two vertical spread or ‘in its interity’, than you don’t know anything about options…

    Hahaha.

    “..Have you applied at All Options, maybe they are looking for next set of fresh bright eager Juniors.”

    => I’m a reatail trader and i don’t have the ambition to be a MM.

    “index options are much more liquid, so the book is that much more flat.”

    => Now i begin to doubt if you are a MM… The book is flat on index options? I’ve always read that MM are short vega on index options, just because there is so must buying (most put options) from the public.

    “- Do MM prefer to be long FOTM options or short?
    there can’t be a preference, you dummy, if it’s ‘cheap’ you would want to be long, vice versa.”

    => Strange.
    Why do i read (like someane above said) that MM prefer to be protected against black swans. So there is a preference?

  115. ‘so if as a trader (not MM) you ever wonder if you gets te best execution legging an iron condor’

    lol, if you are looking to trade ‘iron condor’ then yes, you don’t know what you are talking about, haha, this guy really cracks me up.

    ‘I’m a retail trader and i don’t have the ambition to be a MM.’

    so you are looking to make money off options when you don’t know how option dealers operate?

    ‘I’ve always read that MM are short vega on index options, just because there is so must buying’

    that’s one of the reasons why skew exists, demand-supply, but that doesn’t mean mm would be short, he makes market buying from one and selling to one, also don’t believe everything you read, there are lots of people like you out there, writing and when they don’t know what they are talking about.

    ‘MM prefer to be protected against black swans. So there is a preference’

    as a trader/mm, you can’t have your book blowing apart, you need to survive bad days, so yes there is a preference not to be caught short fotm in gaps, that’s another reason for smile/skew.

  116. Pffff, i’m getting tired of you. :-s

    ***”‘so if as a trader (not MM) you ever wonder if you gets te best execution legging an iron condor’

    lol, if you are looking to trade ‘iron condor’ then yes, you don’t know what you are talking about, haha, this guy really cracks me up.”***

    => Or you are too stupid to understand me or you are not trying.
    The purpose of my question was to know when im getting the best execution of my order:
    A) Sell first a putspread for 100€ and then a callspread for 100€
    B) Give my broker the command to sell a iron condor for 200€

    My pratical experience tells me that decomposing a order gives a better result, but i would like to confirm this from the perspective of a MM.

    ***”‘I’m a retail trader and i don’t have the ambition to be a MM.’

    so you are looking to make money off options when you don’t know how option dealers operate?***

    => I know how a MM operate, but if you are not working in that business you don’t get the whole picture. That’s way i ask my questions to MM. A helpful MM, apparently you are not one of them…

    ***‘I’ve always read that MM are short vega on index options, just because there is so must buying’

    that’s one of the reasons why skew exists, demand-supply, but that doesn’t mean mm would be short, he makes market buying from one and selling to one, also don’t believe everything you read, there are lots of people like you out there, writing and when they don’t know what they are talking about.***

    The things i read are more relaible than you. Are you Sem van Berkel
    I asked if it is correct that MM are short vega and you said no.
    So you maked a mistake, MM or not…

  117. Wilmott is far from a reliable forum. It’s a playground for trader wannabes. Apart from that, the thread you link to is talking about swaption vol. The market makers there are the big banks, not the market maker firms you find in Amsterdam. Big difference.

    I’ve got a question for you. Why do you ask a question, just to tell someone who bothers to answer that he is wrong? If you already know the answer, it seems a bit useless to ask…

    As someone else already said: don’t believe everything you read.

  118. “I’ve got a question for you. Why do you ask a question, just to tell someone who bothers to answer that he is wrong? If you already know the answer, it seems a bit useless to ask…”

    => I don’t have “the” answer, but i wanted to ask ‘experts’ to confirm or reject what i’ve read somewhere or what i experienced as a trader.

    So when i ask something, it is to learn and improve as a trader.

    The problem with that one person is that he tried to insult me. Yes, that borthers me. And when i looked closer to his answers i discovered a ‘fault’. And that from someone who treats me as a noob and pretends he is omniscient.

    But i repeat myself, i read this blog (and others) to learn. So i’m grateful to those who are helpful.

  119. ‘Pffff, i’m getting tired of you. :-s’

    ditto.

    ‘Or you are too stupid to understand me’

    ditto.

    ‘I know how a MM operate’

    how did you figure that, it came all to you in your dreams?

    ‘A helpful MM, apparently you are not one of them…’

    you are so stupid, you don’t even realise that. i am actually being very helpful to you by pointing out that you should not be trading something you don’t know nothing about. In fact the other MM got so worried that he asked me to shut up @8:56 because in absence of dumb retail flow like you, how would mm make a living.

    ‘The things i read are more relaible than you’

    what do you read?

    ‘I asked if it is correct that MM are short vega and you said no.
    So you maked a mistake, MM or not…’

    what’s the mistake?

  120. Insofar as I may be heard by anything, which may or may not care what I say, I ask, if it matters, that you be forgiven for anything you may have done or failed to do which requires forgiveness.

  121. ‘http://www.wilmott.com/messageview.cfm?catid=38&threadid=91383′

    Did you see the headline on that? ‘Sellers of swaption vega’ Don’t tell me you are doing iron condor on swaptions, who is your counterparty, Goldmans?

    In terms of someone being short vega when there are few natural sellers, the case always is regarding realised vol < implied vol because of this, the natural buyer has to pay sufficient premium, much like insurance business.

    The specific case is being short fotm, that tail risk of complete blow up is complete no-no.

  122. ‘The problem with that one person is that he tried to insult me.’

    I am sorry if i hurt you, my first boss was an absolute asshole to me but he did teach me a lot, so i didn’t really mind.

    ‘And when i looked closer to his answers i discovered a ‘fault’.’

    what fault?

    ‘And that from someone who treats me as a noob and pretends he is omniscient.’

    you are a noob, and i am not omniscient, how could anyone possibly be.

  123. “‘A helpful MM, apparently you are not one of them…’

    you are so stupid, you don’t even realise that. i am actually being very helpful to you by pointing out that you should not be trading something you don’t know nothing about. In fact the other MM got so worried that he asked me to shut up @8:56 because in absence of dumb retail flow like you, how would mm make a living.”
    .
    .
    .
    => All you do is constantly repeating how ‘stupid’ i am. Thats a strange translation of helpful…
    And ok if that is your personality, but saying that i’m a dumb retail trader without giving any justification, is very poor.
    .
    .
    .

    “‘The things i read are more relaible than you’

    what do you read?”
    .

    => Mcmillan, Natenberg, Augen,…
    .

    .
    .
    “‘I asked if it is correct that MM are short vega and you said no.
    So you maked a mistake, MM or not…’

    what’s the mistake?”
    .
    => You said that MM are not short vega, but have a ‘flat book”. That is not what i read about index options.
    See this:

    https://docs.google.com/viewer?a=v&q=cache:s9P62FClEzgJ:finance.wharton.upenn.edu/~rlwctr/papers/0601.pdf+&hl=nl&gl=be&pid=bl&srcid=ADGEESjVg8cLiLcP15el3JEGoI_vaea042OkKZt_Ku_XoMlicGH6cWCL6BoXkfozEMcvjoUvz2BO3erw5FJp51upFziNWWQ7Ygb_gH-gmaWfjuSnw-LREdSU0fUHmPQmh-IvtFFBg4l5&sig=AHIEtbRJD4tKBHGAPo71ITyakBpE6T8Xfw

    If MM are net short options, than they have negative vega…

  124. ‘All you do is constantly repeating how ‘stupid’ i am’

    okay, let me say sorry again, does it help?

    ‘i’m a dumb retail trader without giving any justification’

    justification is that bid-off on condor is wide enough to make sure that over the long term you would lose money, you have to, other wise the mm would never be on the other side of the trade, he has to earn his living off you.

    ‘If MM are net short options, than they have negative vega…’

    are they short all the time or only if they expect vols to come off or with high probability realized < implied ?

  125. ‘big takeover rumours a IMC…..’

    that’s not true, everything is going fine at IMC, these are only invented rumours to create unjustified anxiety. Let me add that things at IMC are much better than what they appear in this blog.

  126. Virtu Financial (one of the best firms) was looking into acquiring Nyenburgh (one of the worst), though I don’t know what came out of that.

  127. Say what you want about IMC, they have made a ton of money in the past. I dare anyone to say the same about the “experts in liquidity” a.k.a. Nijenburg.

  128. how much was nyenburgh up in last few years, there are couple of people who are always asking the rest to go and buy the company statements from the dutch registrar, has someone got this?

  129. Does anybody know what the status on the bonus caps is? As part of the Kunduz-agreement a 25% bonus cap was going to be implemented (100% in Europe). Has that been passed in Parliament already? When is that scheduled?

  130. what are they going to do here? list futures on European indices? can’t open the article since not a subscriber to De Tijd.

  131. This is a copy:

    CME Group, ‘s werelds grootste beurs voor futures, strijkt neer in Europa. De beursgigant opent weldra een derivatenbeurs in Londen en kruist zo de degens met rivalen NYSE Euronext en Deutsche Börse. De stap is een direct gevolg van de nieuwe wetgeving die de derivatenmarkt, goed voor zo’n 600.000 miljard dollar, aan banden moet leggen.
    *
    De beursgigant uit Chicago ontvouwt eerstdaags zijn plannen voor een nieuwe derivatenbeurs in Londen bij de Britse beurstoezichthouder. De beurs moet dan in het tweede kwartaal van 2013 van start gaan. Eerst zal gefocust worden op wisselkoerscontracten, later zullen renteproducten, grondstoffen en andere volgen.
    *
    CME, de groep boven de iconische Chicago Mercantile Exchange, wil al langer uitbreiden naar Europa. Maar door drastische nieuwe regels voor derivaten of afgeleide producten die in Europa en de VS in de steigers staan, komt dat proces in een stroomversnelling terecht.
    *
    In Europa en de VS willen de regelgevers de gigantische derivatenmarkt, goed voor een notionele waarde van meer dan 600.000 miljard dollar, onder controle krijgen. Vandaag gebeurt het gros van de derivatentransacties nog buiten beurs (OTC of ‘over the counter’, red.) en buiten het zicht van de regelgever.
    *
    Dat is binnenkort verleden tijd. Waar mogelijk zullen de contracten binnenkort op een beurs verhandeld moeten worden en afgewikkeld worden bij een centrale clearingpartij (CCP). Die CCP bepaalt hoeveel onderpand de marktpartijen opzij moeten zetten om een transactie te sluiten en garandeert de afwikkeling van de transactie.
    *
    Dat de gigantische OTC-handel binnenkort op reguliere beurzen plaatsvindt, creëert zelden geziene kansen voor de beursuitbaters. Deutsche Börse en NYSE Euronext staan al sterk in derivaten met hun respectieve platformen Eurex (Frankfürt) en Liffe (Londen). Nu ook CME Group voor Londen kiest als uitvalsbasis, wordt de Britse hoofdstad stilaan het wereldwijde centrum voor derivatenhandel. Ook Nasdaq OMX en IntercontinentalExchange zijn in Londen aanwezig met een derivatenplatform.

  132. CME Group, the world’s largest exchange for futures, landing in Europe. The exhibition will open soon a giant derivatives exchange in London and as the crosses swords with rivals NYSE Euronext and Deutsche Börse. The move is a direct result of the new legislation that the derivatives market, accounting for about 600,000 billion, to lay tires.
    *
    The exhibition giant Chicago unfolds soon his plans for a new derivatives exchange in London at the British stock market regulator. The scholarship must in the second quarter of 2013 to start. First will focus on foreign exchange contracts, interest will later products, raw materials and other follow.
    *
    CME, the group above the iconic Chicago Mercantile Exchange, would already spread to Europe. But by drastic new rules for derivatives or derived products in Europe and the U.S. in the scaffolding, which is in a process accelerated.
    *
    In Europe and the U.S. regulators want the huge derivatives market, representing a notional value of more than 600,000 billion, under control. Today is the bulk of the derivative transactions are off-exchange (OTC or “over the counter”, ed) and out of sight of the regulator.
    *
    That is soon past. Where possible, contracts will soon be traded on an exchange and settled by a central clearing party (CCP). CCP that determines how much collateral the players have to set aside a transaction to close and guarantees the settlement of the transaction.
    *
    That the huge OTC trading soon on regular exchanges take place, creates opportunities rarely seen before the fair patrons. Deutsche Börse and NYSE Euronext are already strong in their respective platforms Eurex derivatives (Frankfürt) and Liffe (London). Now also CME Group chooses as a base for London, the British capital becoming the global center for derivatives trading. Also Nasdaq OMX and IntercontinentalExchange are present in London with a derivatives platform.

  133. Vinnie was involved with the forerunner to Mako (Saratoga), but since 1999 it’s been Segel (and Close Brothers for a brief period).

  134. Vinnie, that’s an American mystery, a guy who has no clue of algo trading own one of the best firms in the sector…

  135. whatever – you dont know what you are talking about.

    hes always been one of the main partners in Mako

  136. Jack,

    Isn’t it time for a new story?? The markets are dead so a nice article would break the day.. ;)

  137. ‘Isn’t it time for a new story?’

    come on IMC, let us hear something new, there must be some interesting story to tell

  138. Since someone asked: Nyenburg lost 3.4 million euros in 2010, in 2011 they made around half a million. With a workforce of around 60 and favorable trading conditions, a disappointing result.

  139. Frank Vogel shows some solid performance with his real economy companies (sarcasm). All of them major fails, e.g. the Frango grill in Delft. Some issues with the former chef. But at least his wife is really going places with her interior design company (equipping FV related companies).

  140. Has anyone heard about TBricks option platform. Is it faster then Orc in terms of execution? There is a rumour all options is using it.

  141. “All Options once tried opening a branch in the Caribbean”
    And All Options is now trying to keep the Amsterdam office open, with it’s continuous bad trading performance.

    And yes “anonymous August 22nd, 2012 at 4:00 pm” they have at least been testing T-Bricks. I actually noticed the demo version T-bricks made for them (woops, sorry), when T-Bricks showed me their product.

    T-Bricks is pretty good.
    But hey, you can give a monkey the best software ever made and run it on the best hardware, but it will still trade like a monkey ;-)

    So no worries; All Options will eventually go down the drain.

  142. ‘Since someone asked: Nyenburg lost 3.4 million euros in 2010, in 2011 they made around half a million. With a workforce of around 60 and favorable trading conditions, a disappointing result.’

    how much did those 60 people get paid combined total, 5-6 million ? are those losses being made up by shareholders/capital ?

  143. ‘Has anyone heard about TBricks option platform. Is it faster then Orc in terms of execution?’

    supposedly faster, but i am sure ORC will claim liquidator to be faster, some breakaway ORC people founded tbricks, a la tibra, main difference is its c++ based while orc is java based. didn’t optiver put in their own F1 which is much faster, doesn’t that take away any speed claims that orc or tbricks might come out with?

  144. ‘But hey, you can give a monkey the best software ever made and run it on the best hardware, but it will still trade like a monkey’

    why does Allard even bother, as a trader hasn’t he realised yet that he should stick to his trading style of special sit punting rather than algo/stat mm?

  145. ‘are those losses being made up by shareholders/capital ?’

    um yeah. who else? the dutch taxpayers? the tooth fairy? and yes total comp was around 6m (predominantly fixed salaries). again, not so impressive.

  146. ‘who else? the dutch taxpayers? the tooth fairy?’

    it can be made up by the employees whose current and future base and incentive salary reduction will reflect the lack of profitability?

  147. Silly idea. At the rate of 2011, they would need more than a decade to make up for the loss of 2010. No sane trader would agree to work under the conditions you set out, so the company would effetively have to replace their entire trading staff and new hires would not accept losses from the past being carried forward. Moreover, under Dutch law it’s very difficult for the employer to enforce the reduction of base salaries (let alone on the grounds that the employer is trying to offset his losses).

  148. Could you explain what you mean when you say you buy orc for its models and not the connectors. the vol models in orc are pretty basic. dont think this is the value you get but rather connectivity to the market.

  149. as far as i know orc latency weakness is inside liquidator. sending/ serializing and receiving/deserializing messages accounts for 10% of end to end latency. why would a connector make much difference?

  150. Take into consideration that the top dogs use hardware based connectors, and probably some hardware based algos by now.

  151. Dean has left IMC Sydney. He is now a male model for bonds underwear. Heading to california soon for further modelling opportunities.

  152. Whatever the reason, there’s a big hole in the products he was quoting. It akmost appears like IMC has gone out of business. Not that I’m complaining about that for a second..

  153. yes it is, as ETFs might diverge substantially from the underlying and then a MM with large inventory can have big losses

  154. All while the issuer is raking in a fee on one end, and you’re eating your funding costs on the other. Then the issuer starts playing games with redemption availability. Easy enough to fuck up, even for an underwear model.

    P&L rumors?

    Apparently shaking your ass for a discount brand is the new killin it.

  155. the best business is indeed to be an ETF issuer, a broker, or an exchange: you get a fix fee for every transaction without being exposed to any market risk (e perfect hedge at zero costs). Isn’t this the only real arbitrage available today in financial markets?

  156. yeah, massive success is being a sales “trader”, or fee for service financial adviser. yee hah. sexy stuff clipping tickets.. fail.

  157. ‘yes it is, as ETFs might diverge substantially from the underlying and then a MM with large inventory can have big losses’

    how easy is it for the mm to redeem or create new ETF?

  158. ‘Isn’t this the only real arbitrage available today in financial markets’

    how’s that arbitrage, what happens if NDQ fucks up FB or a competitor CME enters European market?> it’s like any other business, real costs, unseen liability and real competitors.

  159. ‘sexy stuff clipping tickets.. fail.’

    not everyone can or even want to be out there punting? you call the business manager of the footballer fail too just because he can’t kick soccer ball like his client?

  160. ‘lol butlien.’

    If Matthew Butlein sells underwear, there is a good chance Wiet Pot will turn IMC into a traditional Amsterdam coffeeshop.

  161. So?

    you would think it’s hard for non-trader to find a replacement for the departing sr trader?

  162. which traders and why would non-trader management engage them to find a new sr trader to make market on sterling-aussie etf, does it have sufficient volume, isn’t it easier to just get fxcm account and just take a leverage punt, you would think the whole FX market for retail is a leveraged slot machine?

  163. @ 8:52 pm ‘they are traders’

    Wow. Now that speaks volumes. Always though he was the only trader amongst never ending tech support guys. Comment confirms it..

  164. People who don’t take risk actively in the market should stop calling themselves traders, either ex-traders if you used to take risks a while ago or management or execution or tech etc

  165. But, everyone knows it’s the tech support guys, managers and HR chicks & the hotter front desk girls that add the real value. Trader is just a monkey who adjusts parameters and struggles with excel :-P

  166. Man lying dead in home ownership month

    The police yesterday afternoon the body of a 56 year old man from Leeuwarden found in his own home. The man was already more than a month ago to be deceased. That let the police know today.

    A neighbor had a lot of flies and guessed that it came from the house located next to his house on the Julianalaan. The police assumes a natural death.

  167. Man arrested for filming woman buttocks

    Leeuwarden is a man arrested for filming female buttocks. On the memory card of his camera were as many as sixty films by women buttocks.

    The man, 50 years old, watched the women and then filmed their bottoms. The friend of one of those women tipped off the police. Who went to investigate and caught the man in the act.

    Previously
    The man is apparently a fan of filming woman buttocks, because he’s been caught several times. He has been fined.

  168. Man wants 60 bicycles ‘laundering’ in canal

    The police last night a 41-year resident of Leeuwarden arrested after he was in the center of the town 60 bikes in the canal had thrown. The man explained to officers that he had just stolen bicycles chosen and that he wanted it this way ‘laundering’, reported to the police.

    Bystanders had the man during his action are caught. Along with dozens of policemen have bikes out of the water. The man is enclosed.

  169. I like how you asinine traders call everyone in IT “Tech Support”. I saw a guy call one of the quants “Tech Support” the other day. You guys are clueless, ok? In just a few years from now a fucking robot will do 90% of your job, and it won’t even bother trying to constantly date HR. Pathetic.

  170. yo tech geek, not everyone here you listen to is trader, leave along asinine, and most of the times if you hear traders saying something ridiculous, it’s bantor, so don’t take it personally, yes?

    in this giant ass world of competitive tech driven trading, it’s hard for anyone asinine to survive too long unless of course they are sucking mgmt off.

    you don’t want a piece off that hot ass in hr, or is it case of sour grapes techie?

  171. En wat betaal je bij Mijnbroker voor opties op Eurex of in de VS? Oh, kan dat niet eens?
    Bovendien: als je 200.000 werkkapitaal hebt zit je vast aan een positielimiet van 200 short opties. Daar zit je nogal snel aan met fondsen als PostNL, Aegon, KPN of ING. Kun je beter bij IB zitten.

  172. a casino is the best buy actually, there are much more trading houses and hedge funds which went bankrupt than casinos, I would by one immediately if I only had the money. The owner of a casino is like a lucky trader getting all retail flow.

  173. running a trading business vs running a casino business are wholly two different ball games, are you guys high comparing those two?

  174. ‘The owner of a casino is like a lucky trader getting all retail flow.’

    we have something in financial market like that, it’s called an exchange.

  175. ‘running a trading business vs running a casino business are wholly two different ball games, are you guys high comparing those two?’

    no, they are very similar if you are playing the games of probability and there is a reason why top traders are also top gamblers, especially in poker

  176. ‘no, they are very similar if you are playing the games of probability’

    so you think casino is game of probability where the odds against you at best are 51%?

    ‘there is a reason why top traders are also top gamblers, especially in poker’

    actually it’s only poker, since you are not gambling against house with significant advantage, what percentage of casinos revenue do you think comes from these top traders playing ace poker on their floor

  177. ‘‘are you suggesting IMC owners should disinvest from trading and buy a casino?’

    yes’

    yes you are high, trying running a casino and then a trading business, and then come commenting on this strategy of transition.

  178. no actually it’s you who implied that running a casino and a trading firm is one and the same, having worked in both, i would advise you to atleast pick up a sample firms accounting statements to see how these firms spend and make money to get an initial idea of how different these businesses are, thereafter you can stop blabbering like those hyper kids on the floor who seem to think they know it all since they pulled in couple of million last year.

  179. they have quite some technology in casinos, e.g. detect card counters via special HD and SW , real time surveillance, database systems with face recognition features, etc. Drinks, sexy girls, bitches, DJs and music can be outsourced, and this is cheap. The main entertainment will be gambling itself anyway. The most profitable games are slot machines and other video games, quite some technology overall. Moreover, do not forget that the owners of IMC do not understand anything about technology, but they still run a trading company, so why can’t they do it with a casino?

  180. so you are saying the casino operator thinks technology is the core competency while the entertainment can be outsourced? That slot machines are heavy in technology that casino can develop in house to differentiate itself from other casinos?

    Does IMC have atleast half of the staff on the technology side and if rob and pot has no idea of what the CTO does with it?

  181. In both you can make money because other people have different judgements about probabilities. Casinos are pure ripoff. Sports betting is in between. But there are more industries that are going digital; industrial designing, logistics, media. Transitions going slower though, but the best are furthest with IT. So your point, nobody cares

  182. @August 1st, 2012 at 2:42 pm

    ‘HR group in IMC is sad. They have like 20 or 25 people globally. Not sure what they do other than sleep around with the partners.’

    Niet alle HR. In my cOmpany, a HR Manager wouldn’t have needed hookers if could pick from own department!

  183. ‘In both you can make money because other people have different judgements about probabilities.’

    speaking to gambler’s the sense i get is that they come up with a ‘strategy’ to beat the house, of course the way they are doing is calculating the probabilities incorrectly and in other case following the martingale strategy, double down to recoup initial losses. This is not unlike the case where the retail guy keeps selling otm options all of his trading life to get good returns only to blow up completely one day and give it all back and more to the house.

  184. ‘but the best are furthest with IT. So your point, nobody cares’

    what best, why furthest, what point, and why nobody cares, can you try speaking clearly next time. Your initial point about gambling vs trading is already in shreds, you don’t have to sign-off with confusing statement to save your pride, it’s completely okay to be wrong in this business as long as you hack your losses quickly.

  185. ‘a HR Manager wouldn’t have needed hookers if could pick from own department!’

    so this HR guy gets hookers, which HR guy is this?

  186. no HR guy gets any hooker, the previous comment was referring to the fact that several IMC HR girls have relationships with IMC senior managers, but there is nothing fundamentally wrong with this as long as this does not affect the professional environment

  187. I guess you are working for a trading company but you don’t really know how technology is used to make profits. You seem not to understand the difference between markets and games. You are an IT guy. Go away.

  188. 1. they only generate costs
    2. they generate too high costs
    3. they claim that money has been made because of them and expect too high bonuses

  189. ‘I guess you are working for a trading company but you don’t really know how technology is used to make profits. You seem not to understand the difference between markets and games.’

    you don’t have to guess, just ask. how is technology used to make profits and what is the difference between markets and games?

  190. ‘why are IT guys always considered second rate, supporters, and consequently underpayed?’

    use your head IT geek, you don’t directly generate revenues, you don’t direct the show, you are easily replaceable, and most importantly you don’t have any patent on your work, once it’s automated, that’s it, you can be shown the door, no future royalties on your work, next project for you.

  191. zactly. Only the dumbest “smart techies” work for market makers. They could earn a boatload more elsewhere if they pulled their heads out of their asses.

    If you’re not generating revenue, you don’t count, end of story.

    E.g. Who in Tibra’s tech room got any bonus at all this half? (Don’t all shout out at once).

  192. that’s not a good example, CTO is a management job and not an IT job, that’s why it is payed so much

  193. ‘They could earn a boatload more elsewhere if they pulled their heads out of their asses’

    where? Google perhaps?

  194. ‘that’s not a good example, CTO is a management job and not an IT job, that’s why it is payed so much’

    that’s the key, the cto ain’t coming up with path breaking code, but where and how man hours are being deployed is wholly directed by cto’s management budget policy, thus high renumeration to reflect high impact/budget they wield. It’s of course a whole another valid debate, if you could reduce cxo’s salary’s and how correlated would that be to impact on top/bottom line, cxo’s would of course like to sell 100% positive correlation.

  195. ‘could IT geeks earn 200k sterling anywhere out of banks, not really.’

    the other attractive alternative is to start your own company or work for a startup in exchange for equity and hope for the best, rest just pile up in financials hoping to generate 20% upside on their next best alternative.

  196. really, google and facebook is paying 250k usd? well then the financials probably pay 20% on top of it and attracts the software developers.

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