Euronext to invade Germany
Don’t mention the war. Euronext created country indices for Germany, Spain and Italy. Stock indices consisting of 30 stocks each. Developed these indices somewhere in the summer, but now the plan is to introduce derivatives on these indices. Futures and options on a competitor for the DAX.
I don’t make this up. Plans will probably be postponed forever, because this is not going to work. It will fail. No real flow, no market maker support and no liquid futures market. Empty screens are a common issue for Euronext, but this would be embarrassing.
Liquidity provider roles
Beginning of November traditionally means handing out the market maker licenses in the options at Euronext. Used to be a moment to see who’s trading what. Who captures the scarce option quoting spots.
Things have changed. The number of market maker firms went down, and the availability of “primary market maker” licenses went up. No entertaining play-offs anymore – but still a few noteworthy changes with last year.
All Options returned
Allard Jakobs has always been the comeback kid. Started quoting again in a few stocks on Euronext again. Fugro, Nyrstar, SBM Offshore, Tom Tom and Air France. High on the most shorted list, and Allard is interested. Air France is most interesting, as Allard Jakobs is bearish on the airliner. He’s short 1.04% of the free float. Make no mistake, that’s a directional bet. You don’t need to report hedged positions.
Apart from the troubled stocks, All Options also started trading the AEX options. He won’t be able to see the market on TOM, as his clearer (Goldman Sachs) isn’t connected.
Shuffle in daily index options
The daily index options – only succesful in Amsterdam – are quoted by only five market makers. Cebulon, IMC, Optiver, Maven and 323 Trading. The last two are new, and they replace Leopark and Susquehanna. Cebulon and 323 are low tech, and won’t trade much volume. IMC and Optiver will dominate the daily options. New kid on the block Maven hired a former IMC index trader.
Scrocca left AEX
Last year Scrocca entered the AEX index, twice. With their two entities (Scrocca and Fluhalp). You can’t say they didn’t try. Apparently they failed. They quit, and decide to stick to their knitting. Single stock options.
You can compare the old (pdf) and new (xls) files. Market makers can sign up for new licenses every day, though.
Mini FDAX futures
Little baby futures have been created in Frankfurt. The regular DAX futures are liquid but heavy. Every point is €25, means a single future is worth some 275k. A bit too much for some retail investors. Enter the FDAX-mini, or FDXM. With only €5 euro a point, more friendly towards retail investors. In Germany the DAX serves in 75% of the CFD contracts as underlying. With these mini FDAX futures, Eurex wants to compete against CFD shops like IG Markets. Good luck with that, don’t think Eurex can offer the same leverage.
FDAX Mini started trading on October 28th. A few thousand contracts trade on a daily basis. Volume is slowly increasing, but still tiny compared with the real one.
Optiver cutting staff
The new ceo Paul Hilgers has been at the helm for nearly two years now. First year continued as usual, this year was different. In January a dozen IT staff were shown the door. Later other people left with mutual agreement (Hans Pieterse), fired (Edwin “Joop” vd Kruk) or left for unknown reason (Gerben Gooijer, then head of IT). In October 19 more people from IT were fired. Mostly software testers. Still a lot, for just the Amsterdam office.
Virtu down on lacking currency profits
Virtu released the quarterly figures. While it beat the estimates the stock dropped as much as 8% on disappointing currency trading profits. Flow Traders will release figures next week on November 13th. Euronext is out today.
A few non-listed trading firms have released their results over 2014 in the past month. Spire Europe posted a £19.1 million profit. Spire is a owned by US firm Tower Research Capital. Tower is founded and owned by Mark Gorton. A name which may not be familiar for everyone. Mark Gorton is the founder of LimeWire.
Other European trading operations. Sun Trading made £6 million profit. Jump Trading Europe posted a profit of $24.8 million in 2014.
why do you speculate that the new indexes offered by euronext will not work?
Does De Giro still act as help desk for retail clients calling Euronext with questions?
ofcourse … they fired almost all the Dutchies
NOVEMBER 5, 2015 AT 8:14 PM
why do you speculate that the new indexes offered by euronext will not work?
Because without real order flow, market makers won’t commit themselves to quoting it. And without tight quotes, no flow will develop.
It could work if Euronext decides to introduce the maker-taker model. Meaning, paying market makers a fee if they trade on their quotes.
They create an index composed of “30 companies with the highest free float market capitalisation listed on the main german market” and call it…. “ENDEG” ? WTF? why not “GAX” ?
What’s Tibra’s 2014 results?
Most of the cutting in optiver have been down to the new henchman from Chicago (the IT manager) who enjoys firing people, has an ego the size of a city and constantly watches his back like Caesar! it seems time for the duchies to suffer. Maybe hilgers can pull off another VMD success story..
From what I understand, the Euronext indices will consist of 40-45 German stocks. Or 39-45 depending on your sense of history.
Tibra have made Aud 125 mln the first 10 months of 2015; they have been pronounced dead on this blog multiple times but are very much alive
How have other companies been doing? (Imc, liquid, Optiver, citadel, ctc, getgo)
that’s a great result (if true) for Tibra. In affect they did resuscitate. What about Tibra UK?
Tibra 125 is global? Net profit?
Euronext Amsterdam is toast, most Dutchies are fired, local CEO is French puppet on a string, who’s next?
Tibra made 59 mln AUD i read from the annual report. They do have an australian tax year meaning the result is calculated from 1 july 2014 till 30 June 2015.