amsterdamtrader

Between the champions league final and the world cup in South Africa lies another major football event. This saturday, the 29th of May, the annual All Options Football Tournament will be held again.

All Options definitely deserves a lot of brownie points for organizing this tournament again, in cooperation with Eurex, KBC Clearing and Bennington. For the third time it will be played outside on the football pitch of FC Abcoude, in teams consisting of seven players. Indoor soccer rules apply. No flying tackles allowed.

Last year the winner was KBC Bank, with IMC as losing finalist. In 2008 the trophy was won by the Germans (Eurex). During the indoor soccer era the title was always won by the dividend cowboys of Fortis GSLA, Optiver, Market Wizards and IMC. Would be nice to construct a historical league table, including losing finalists.

Some new teams are participating this year. Petercam, ING, Scrocca and Caerus, the latter probably played under the VDM flag last year. As always, Euronext won’t be participating.

Please pay close attention to the game of 11:36 on field 1. Optiver is playing against Binck 1, and rumour has it Binck has sold this game. Anyway, there will be a photographer as usual and for the first time all matches will be filmed. Event starts early around 9:30, the final is expected around 16:30 and around the same time the barbecue will be set on fire.

Update :
After a long day of football, 323 trading emerged as the winner. The losing finalist was Caerus, who proved to be real Dutch chauvinists because they lost the final on penalties. ING and Better Options were knocked out in the semi finals.

There’s a good reason not to laugh at your former fellow traders being fired. You could be next. Especially when you’re working for IMC. After sacking two traders on bonus day, an additional twelve traders were shown the door. Management doesn’t escape from the cost cutting efforts neither, as the Hong Kong and Sydney offices are centralised under one management now. One must admit IMC has developed a certain routine in firing their employees. Employees with a track record longer than five years make up for a just little more than 5% of the total staff.

IMC isn’t the only trading firm letting people go. All Options has been trying to lay-off dozens of traders and support staff after the take-over of Saen Options. During the fall of 2009 results were pretty bad, bonuses were terminated and large numbers of employees were told to leave.

Here’s the funny part. Amsterdam is part of the Netherlands (really), and in this country it’s rather difficult to fire people at all. You’ll need a permit of the local government agency called the UWV, and explain the reason for firing people. If you have a good reason, you can proceed with the legal stuff in court. Give ‘m some money (say, 1 month per worked year for your firm) and you are done. When you’re trying to fire people because you’ve found other people to do the same job for you for less money – the government will generally show you the finger. You really need true economic reasons to cut staff.

And surprise, the UWV gave All Options the finger and didn’t grant a permit to fire people. It accused All Options to be cooking the books and the firm couldn’t come up with any economic reason. To worsen things for All Options : they face a court hearing for mishandling the labour rights of 100 employees.

A failed firing spree means continue paying the salaries, and take people back. Maybe All Options could persuade them to leave voluntarily, but quitting your job voluntarily means no unemployment benefits. Generally it’s wise to stay nice and as a trader avoid any signs of a “disturbed relationship” ; which could a viable reason to fire you. The firm will have to bleed. The one in charge for firing everyone, is now fired himself. Guess it wasn’t a problem to get a permit for that..

Anyway, still jobs available at IMC and All Options!

The year 2009 is almost gone, and trading has been fairly quiet as usual during the last weeks. Plenty of time to look back on the events of 2009.

One of the few main events this year happened straight in the first month. January 28th the market maker All Options announced to take over rival firm Saen Options. The latter had experienced a troubled 2008 due Volkswagen positions, and All Options was happy to buy some television airtime with the Beursplein 5 former trading pit.

Clan warfare remained low among traders, but the merged firm fired scores of employees in the fall of 2009, including some well known senior positions. The results of All Options didn’t benefit however, and the traders will receive no bonus over 2009.

AEX drops to 1995 levels

A great buying opportunity happened end of february / beginning of march this year. The AEX index dropped below the 200 points level, last seen in July 1995. As we all know, the financial melt down didn’t occur, and the index climbed some 72% to levels above the 330.

Van der Moolen early signs of trouble followed by bankruptcy

Analyzing the VDM quarterly report with some general derivative trader common sense was the first post on this company. Still patting myself on my shoulder re-reading my post on their weird dividend losses. One month later it turned out the balance sheet of the firm clearly carried some obvious weak spots. Traders left the firm to form Caerus Trading, and a few weeks later VDM was dead and buried. Other remains of the firm continue in several new ventures.

The initiative by Optiver and Binck to route all Dutch retail flow straight to the books of Optiver did absolutely gain momentum this year. The market maker lobby couldn’t reach a consensus and has no opinion on the largest and most dangerous threat to the rest of the market. The financial watchdog AFM and other relevant institutions don’t interfere (yet). Nobody trusts Optiver, and Optiver won’t trust their employees. Mobile phones are banned at the office.

And, last and least, this site Amsterdamtrader will see it’s very first anniversary next week. Thanks to everyone who helped with content and grammar in the posts, thanks to the contributors in the comments and the visitors of course. Everyone is invited for the Amsterdamtrader-one-year-anniversary party on January 8th in the Beurs van Berlage. Cheers!

Recently several comments and e-mails by fresh university graduates requested for more information on getting a job as a derivative trader in Amsterdam. As the visitors, Google and this site are close friends it would make sense to write a tiny how-to and where-to get a job in Amsterdam trading firms.

Basically there are seven market makers where university graduates could apply. There are definitely more firms around, but most of them are small operations, or you have to bring your own money or they are only recruiting experienced traders. Some new firms are expected as the broken pieces of Van Der Moolen are probably trying to start something new. The firms without an office in Amsterdam aren’t taken into account at all, but they generally aren’t interesting to apply for a job anyway.

As famous trader Frank Zappa already stated, we’re only in it for the money. It’s hard to say where to find the best bonus deals. At some firms junior traders won’t receive much, and elsewhere the fixed salaries are higher. After the crash of VDM there’s no market maker around giving insight in the trader compensation. That’s a pity.

I’ll just make list of the firms. Very subjective, but one has got to start somewhere.

Optiver
The largest Dutch market maker with a reputation for having the best software and employing the most nerds from all over the world. Their recruitment procedure is though and most applicants fail for the math test. Minor problem is their reputation for manipulating markets and fraud. Legal battles against Tibra and US trade authorities.
Founded : 1986
Location : WTC
International : Yes

IMC
The second market maker is IMC, or the International Marketmaker Combination. In past years the company didn’t know where to spend it’s money and expanded into websites, newspapers and even a bank. Amsterdam office reportedly isn’t doing very well after the departure of dozens of traders. The US operations in the Sears tower in Chicago is dwarfing the Amsterdam office.
Founded : 1989
Location : WTC
International : Yes

All Options
Allard Jakobs started All Options after his earlier company Goed Gedaan Options failed in 1998 on a huge failed arbitrage spread. Was subsequently banned form Euronext for years, but returned in 2005. Made the jackpot with the Altana superdividend trade, bought rival Saen Options early 2009. All Options deserve credits for organizing the yearly soccer tournament. Company appears to be struggling with internal clan warfare and too many managers.
Founded: 1998
Location : Centre (Beursplein 5)
International : limited

Tibra
Traders from Optiver Australia resigned and started their own firm, allegedly taking the source code of Optiver’s trading software with them. Under fire of Optiver’s lawyers ever since in a legal battle. The Australians decided to challenge Optiver on their home market in Amsterdam.
Founded : 2006
Location : Centre (Singel)
International : Australia

Scrocca
Small firm recently evolved into a serious market maker, although still mainly seen as an underdog. Despite the name, it’s an original Dutch firm. Location is even more boring than WTC.
Founded: 1997
Location : Far west (Sloterdijk)
International : no

Flow Traders
Started by former Optiver traders. Not really a market maker but focussing on arbitrage, and according to some press reports quite successful in trading ETF’s. Or just succesful in public relations, that’s another possibility.
Founded : 2004
Location : East
International : Limited

323 Trading
Small market maker which seems to be old-skool kind of operation. Very limited trading, with a very few traders. By far the smallest company on the list, and more like other small firms.
Founded : 2003
Location : Centre (Nwz Voorburgwal)
International : No

After years of begging by the rest of the market, the *ahem* prestigious firm All Options is about to give classes in option trading. Clean your agenda and cancel all appointments for November 10th and 20th, as the master classes will be free of charge and aimed at the very advanced option trader. Euronext and All Options will spend three hours on some Greek variables like vega, theta, gamma and delta. Meet your teacher in this student magazine (pdf, Dutch), seems a reasonable guy. Bad news however is the timing schedule, as the session runs from 10:00 to 13:00 on Beursplein 5. Hence, don’t count on post-class drinks.

You can apply for the free master class by mail. Question remains what a retail investor should do with extensive knowledge of the derivative pricing theory. Nothing really. Market makers compete for split cent margins with full delta hedge, retail folks would burn their money on transaction fees. Nevertheless, let’s not be too cynical and negative about Euronext/All Options joint efforts, although a true step would be to reduce trading fees for retail clients on Euronext. It’s a way better approach than handing over your customers to the sharks of Optiver. Did Binck’s head of retail Marcel Kalse quit his job after resisting the plan of selling their retail customer flow to Optiver?