Buttonwood collapsed under rogue trading

6 Jan 2013

The Chicago based trading firm Buttonwood Trading Group is history after a rogue trading incident in the commodity market wiped their balance sheet in December.

The firm employed some 50 employees and has a stake in several other trading companies across the world – according to their cheap website. By the way, they even appear to have another free great website.

Apart from inexpensive websites the firm used RTS as trading software. As far as I can see Buttonwood has been around since 2008. Company - or whats left of it – declined to comment on the news.

Tontine

Five months ago, when Amsterdam based ETF trader Nyenburgh was bought by Virtu – not all employees were welcome in London. Half a dozen index arbitrage traders, with roots at IMC, were told to leave. With investment from Buttonwood, they started Tontine Trading House. With the mother firm in panic, their start-up venture lost financial backing and had to shut the doors. Close your business within two months and have your apartment stacked with brand new office furniture and trade desks : that’s definitely bad luck.

Tags: Buttonwood, Tontine

33 Responses to Buttonwood collapsed under rogue trading

anonymous

January 7th, 2013 at 9:08 am

well well, what a pity

January 7th, 2013 at 12:06 pm

all these small companies like Buttonwood will disappear, it’s only a matter of time due to increased competition, less opportunities, and consolidation of the market. It’s funny to read this:

http://news.efinancialcareers.com/53545/working-for-a-prop-trading-house/

an article from 2008, all the mentioned prop trading houses do not exist anymore. Despite of being very selective, getting 1000 CVs per month and hiring only a couple of traders…

January 7th, 2013 at 12:53 pm

I don’t know anything about buttonwood, but the companies mentioned in your article I wouldn’t call prop trading houses. Bucket shop is more appropriate. No pay and 50+% of profit is not what you’ll find in any serious shop. From the article:

‘Others offer no basic pay at all. Whatever the set-up, the bulk of pay comes from a share of the profits you make by trading. This could start at 50% and go up as you become more successful.’

January 7th, 2013 at 1:19 pm

any background to the rogue trading incident?

January 8th, 2013 at 1:11 am

‘according to their cheap website.’

it’s more expensive than this blog for sure, Jack?

‘they even appear to have another free great website.’

where’s your free great website, Jack?

‘With investment from Buttonwood, they started Tontine Trading House
http://www.tontinetradinghouse.com/‘

haha, dutchchies wins the award for having the most cheapstake website, hands down

‘Close your business within two months and have your apartment stacked with brand new office furniture and trade desks’

when individual traders get fired from banks, they don’t even get their wallets out of the office, somebody goes upstair and gets it for you, atleast this time they got the furniture, like those alphabay vultures from VDM

‘that’s definitely bad luck’

no that’s financial markets… in real-life

January 8th, 2013 at 1:12 am

‘well well, what a pity’

you euro-types are way too soft, hasn’t this current crisis not toughened you one bit?

January 8th, 2013 at 1:21 am

‘all the mentioned prop trading houses do not exist anymore’

how did you check all the following have closed shop?

– amplify trading
– Elocal Traders
– Met Traders
– TCA Futures
– http://www.ghtradersllc.com/careersInTrading.aspx
– http://www.schneidertrading.com
– http://www.kytegroup.com/

– amplify trading
– Elocal Traders
– Met Traders
– TCA Futures
– ghtradersllc
– schneidertrading
– kytegroup

January 8th, 2013 at 1:26 am

‘Bucket shop is more appropriate’

bucket shops are old skool and illegal, the correct term you are looking for is trading arcade

‘No pay and 50+% of profit is not what you’ll find in any serious shop’

these houses have payout of 50%, 60%, 70%, 80%, 90% dependent on level of profitability. If you generate 50k, expect shop to retain 25k; if you generate 500k, maybe shop would retain 50k

January 8th, 2013 at 8:44 am

Anyone know which HK HFT was involved in the Kospi error trade?

January 8th, 2013 at 9:33 am

What happened in the Kospi?

January 8th, 2013 at 12:10 pm

I heard it was eclipse

January 8th, 2013 at 12:46 pm

Did anyone make any money from it?
$30M is a lot of money to donate to the market.

January 8th, 2013 at 12:47 pm

YP, eclipse lost 30MLN.. they can all go home

January 8th, 2013 at 1:05 pm

30 million what? Usd? Far too big. It is much less than that

January 8th, 2013 at 1:07 pm

If they lost 30 million usd then the firm is bust. Are they trying to close out positions in other markets?

January 8th, 2013 at 1:21 pm

Does that mean that the European expansion has been postponed again

January 8th, 2013 at 1:31 pm

Relax ladies. It was nowhere near $30m, Eclipse is not bust, and it’s business as usual.

January 8th, 2013 at 1:50 pm

Well there were 100s of thousands of kospi futures involved. Cash delta of each is about 130k. So I’d say 30mil is a fair estimate.

January 8th, 2013 at 2:01 pm

What exactly happened?

January 8th, 2013 at 2:05 pm

Incorrect. Around 30k futures

January 8th, 2013 at 2:10 pm

I heard millions of futures

January 8th, 2013 at 6:45 pm

http://ibankcyclist.blogspot.nl/2013/01/its-getting-hot-here-mistakes-happen.html

January 8th, 2013 at 7:38 pm

perhaps Paul Hilgers can lend them 30 mln and bail them out? chicken feed for him

Ethanol and Kospi trading losses - amsterdamtrader

January 8th, 2013 at 9:19 pm

[...] anonymous: perhaps Paul Hilgers can lend them 30 mln and bail them out? chicken feed for him [...] [...]

January 9th, 2013 at 1:14 am

‘Does that mean that the European expansion has been postponed again’

you are so funny, haha

January 10th, 2013 at 3:57 am

I supervised that the construction of this website, and I am deeply offended you think it is cheap

January 13th, 2013 at 1:14 pm

In a shop like Buttonwood this was bound to happen, sooner or later.

January 13th, 2013 at 3:30 pm

how did you reach to this conclusion about Buttonwood? Would this not be valid for all the companies of this nature and size?

January 14th, 2013 at 11:47 am

a shop like Buttonwood is unprofessional by definition, they run a simple concept: outsource all technology, hire traders and fire them as soon as the strategy stops making money.With the end result of continuously running new strategies, some of them make money at the beginning and then lose everything in one shot, like what happened. A serious strategy takes years to develop and a team of professionals. It can never be developed at a place like Buttonwood.

January 14th, 2013 at 12:33 pm

“what’s unprofessional about that, they are in business of making money, not to be professional?”

I’d say Buttonwood failed pretty bad when it comes to making money, don’t you agree?

Have they ever made any money? …. And now they’re bust.

January 14th, 2013 at 3:09 pm

TNT: winners/losers?

January 14th, 2013 at 3:20 pm

winning!

London Gregoire: Meijer shouldn't shave until TOM overtakes Euronext in the dutch options [...]

TOM to expand in Europe - amsterdamtrader: [...] Euronext sues TOM on AEX Options [...] [...]

Aad: Same shit over here. And really, we have al the specs to be fast enough. [...]

ghostrider: truely tragic. condolences. [...]

vikr: Hats off to RoCo. [...]

VdM: Allmost on the same day another well known person from the trading community in Amsterdam passed awa [...]

NRC: Advertisements in newspaper NRC: https://dl.dropbox.com/s/uwbjka8dgg26exh/20130406_NH_selectie_2_12. [...]

anonymous: Agreed [...]

anonymous: let's go to IMC since they pay good bonuses there [...]

anonymous: Tibra is not doing well, and when the CFO, who knows everything about their finances, leaves this i [...]

Buttonwood collapsed under rogue trading

33 Responses to Buttonwood collapsed under rogue trading

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