Optiver earnings amaze, again
Last year I wrote “Optiver killed it in 2014”. The most succesful Dutch trading firm had a great year. But how to write a headline for their 2015 results? The latest results are nothing short of amazing.
Profits up 60%
The net profit was €395 million in 2015. That’s almost €150 million more than the previous year. That’s a growth percentage of 60%. Rival trading outfits like IMC, Virtu and Flow Traders saw only modest growth. The results for IMC Financial Markets were called “decent”.
Compare the 2015 profits for the mentioned trading firms:
Inspiring annual report
The financial report submitted at the chamber of commerce is hard to read. Looks like papers have been in the washing machine a few times (pdf, but don’t even try). Was about to believe in a farfetched conspiracy theory (deliver unreadable papers to hide company secrets).
But that’s not their style. Here’s the clear and colourful annual report. It’s a good and inspiring read. If you don’t know any better, it gives you the impression they are in the trading business for charity. Improving the market. They don’t mention the Hammer.
No hammertime, but they do mention and thank Luke McElnea. The ceo in APAC was sacked last year. I assumed disappointing profits in the region would have something to do with it. Turns out there has been another issue instead.
Optiver shares ; €2600 bid
Back to the figures. For the first time the trading result was higher than one billion (€1.2 bln). The average pay per employee was €370,000. Headcount went up from 807 to 913 people. There are currently 1.4 million shares Optiver outstanding. The current bid is €2600. That’s €1000 more per share than Rob Keldoulis received for his 30,000 shares last year.
Long term graph
Virtu was founded in 2008, Flow Traders a few years earlier. For the long term graph let’s compare Optiver and IMC. The firms haven’t always been this profitable. Optiver had a tough year back in 2009.
They’re only 2400 bid, but either way I’m sure Rob will be just fine, I’m quite sure he didn’t sell down all his position
Korte broeken op het werk zouden verboden moeten worden. En niet met je schoenen op de stoelen aub. Aap.
What makes you think he’s wearing shoes?
Nothing. Merely giving him the benefit of doubt.
On top of the last bull market before Internet bubble casual clothing was the thing in the City even if you visited clients and arrived on a trading floor in your suit it was considered overdressed……
my flipflops were frowned upon at beursplein 5
Great result, IMC top management will be jealous
I’m not sure where you’re getting your Virtu numbers from, but according to Jay Tufo, the 2015 global profits at Virtu were a little over $350MM USD and average employee salary is roughly $450K USD (not counting bonuses)
IMC is always a bridesmaid and never a bride. Optiver is so much more superior than them.
@4:08 am Maybe try their IR website. From the press release: “ Net Income of $197.5 million; Adjusted Net Income* of $272.8 million, which excludes IPO related adjustments
Adjusted Net Trading Income* of $500.7 million
Adjusted EBITDA* of $352.4 million; Adjusted EBITDA Margin* of 68.9%”
If their average employee salary is $450k, then their bonuses weren’t all that high. Total employee compensation was 88m for 148 FTE, or $594k per employee.
The imc optiver spread blows out whenever there is volatility – 2008, 2011, 2015 – gfc, euro fc, china. Bigger nuts
the guy in yellow looks like a beast
Guys, I realise that haters gonna hate but one thing has to be said: props to Jay Kay.
Hi style for running Optiver’s never won him popularity contests internally and he has sure burned through a load of people at the top level but he’s proven all his doubters wrong. 30+ years in the black and always outperforming the peer group. And the whole time, the guy’s kept a (relatively) level head.
Also creds to Dutch level-headedness. Over in Britain he’d have been knighted ages ago and have been dragged into a different show.
Really good work.
Does anyone know the split of trading income by location and product? I am sure they are flat in options market making in Europe…
true they were close to flat options europe
printing cash though sizing up in india i hear
trading size in madagascar too
What are they doing better than IMC?
@8:17. The buy cheaper and sell higher
Do they have better market making algos? Why is IMC then not just hiring a couple of quants from optiver to copy the logic? All algorithms are easy to copy if known.
It’s not technology
Hoping to get a job there ? Want to buy some shares ?
@5:24 The algos are not always the single factor. Some traders have an innate ability to read and accurately predict the market.
As an example, a bunch of traders and Quants left Optiver last year to setup Autumn Compass. They did so because they knew they could take the strategies and techniques they’ve been taught at Optiver tweak them and add their own intuition to get more PnL – where as at Optiver they weren’t allowed to perform the kinds of trades they wanted due to risk and compliance reasons, hence minimizing their potential bonuses, motivating them to start their own shop
But I’m guessing IMC has the same kind of trading constraints. So in the end the really good traders will either stay put or setup their own concern.
i thought autumn compass was ex-imc traders?
According to the company filings the directorship structure is as follows:
Joseph Zhang
Zheng Bo
Chris Ooi
The last two worked at Optiver as a trader and code monkey respectively.
Just pinged some contacts at Optiver, the general impression is that they weren’t “dumb” but at the same time they weren’t anything special either.
Rumor has it they tried to bring some more people from Optiver along with them but they were unsuccessful.
where can i buy puts in Autumn compass?
Also note thatTibra used to eat more of that pie…are they still trading the big index slots the way they used to?
Seems like they’re progressively closing shop…
It always amazes me how easily rumors are being created and spread…
Troubles at IMC Zug, their home-grown strategies are making more money at Tower Research than at IMC. Jack, when will you report about this? Hint: the Hong Kong case
It seems IMC is crumbling at the edges, time for an IPO before it comes crashing down?
some trading desk heads have been given the opportunity to move to Amsterdam with a guaranteed 2016 bonus of 500k euro
ANONYMOUS
JUNE 8, 2016 AT 6:28 PM
At Optiver?
Why?
IMC Zug office is closing
why?
John Mayer page 12
“We stick to what we’re good at: Market Making” page 29.
…umm-kay
Rumour from the US:
Optiver lost $100 mio in Chicago earlier this year
Did your source mention how?
“floating around about a firm, which is frequently mentioned on this website, suffering from big losses in soybean meal options, any estimates?”
This maybe?
i think you should get a better source , these rumors are rubbish and started by some petty local in the soymeal pit who goes there everyday to get away from his wife
optiver is tracking a tiny bit lower than last year get a life
Get an interpunction course
@June 12, 2016 at 7:41 pm
because all their strategies are no more profitable, the costs are quite high and revenues are low and in a declining trend, in addition there is no trust that local management will improve the situation in the near future. The idea is to move these weak strategies to Amsterdam with some key Zug people and the hope that new Dutch management will improve the situation. Once the know-how is transferred, even the remaining staff will most likely get fired. Historically almost every employee who transferred to Amsterdam was terminated within one here, this is the reason they offer a fix bonus for 2016 to some selected people.
@3:28 you should go get a life too. Or are you one of those 5 lot locals that front run orders for a living?
How does alloptions compare?
I believe that soybean vol went from a 5yr low to a 5yr high in a month and half, someone must’ve got caught.
Trading his and lows. I know some failed optiver gamblers who are fond of that
In Nederland blijven miljardairs (relatief) gewoon.
http://www.quotenet.nl/Nieuws/Zo-mooi-woont-beursbaasje-Paul-Hilgers-in-Amsterdam-foto-s-181691
Ja in 020 is je euro een daalder waard.
There’s certainly a large reckon with to find revealed yon this dispute. I darling all of the points you have made.
http://www.combiboilersprices.com/