amsterdamtrader

Speaking of the World Cup, a dozen of Dutch traders from remote areas as Hong Kong, Sydney and Dubai are visiting the match. The traders from Kokomo Capital, run by former Curvalue/VDM traders, had some surprising connections with Mandela’s ANC and invited several IMC traders and Matthew Hoyle. A long 13 hour flight from Asia, but hell… we should all have been there. Can’t wait another 32 years. Glad to report Optiver and Flow Traders have send reinforcements for the Orange Legion. And kudos to Madiba for arranging 74 tickets and arranging a smooth trip.

IMC’s trading business is growing rapidly down under. It has taken the zero sum game of derivative trading to a distinct higher level. The company has been buying derivatives from itself in six months in 2007. Agreed, at times it’s useful to mark the last traded price in your favour so it looks your big position is doing well. However, the exchange isn’t particularly happy with you trying to manipulate the market.
The exchange of Australia, ASX, has found evidence of IMC trading against itself for an astonishing number of 9705 times between February 1th and September 14th in 2007. Over nine thousand times of selftrading, that’s more than an occasional junior trader “defending” a position. Last month the exchange tribunal fined the company for $85.000.
All the trades occurred when an algo trading system traded actively against the market, including the market maker unit of IMC. For some reason this innocent explanation of IMC doesn’t sound like the whole story. Don’t exactly know which prices have been manipulated, but the high number of selftrading and the sudden stop in September suggest something else. The lawyers advised IMC not to contest the malpractice, which was apparently highly appreciated by the ASX tribunal. On the other hand, a $85k fine is small change for IMC but still a lot when it’s really a matter of innocent different systems doing occassional trades with other company units.
Anyway, ASX believes IMC Pacific didn’t do it on purpose and no investor got hurt during the party (right). Let’s fine them for $8,75 per selftrade. That will teach them. In the meantime, rival market maker Optiver in the Pacific earned the 35th place in the most wanted employers in Australia in Business Review Weekly last month.

Rene Schelvis just bought a brand new car, quotenet reports. Together with Rob Defares he has founded IMC back in the old days of the open outcry trading. Schelvis was known for being the cautious one, whereas Defares had more appetite for risk. Schelvis sold his 30% stake in IMC to Wiet Pot in October 2007. With an estimated net worth of 50 million euro he entered the Quote 500 rich list on place 471 in 2009.

His new Lamborghini Murciélago LP670-4 SuperVeloce is a true supercar with a corresponding price ticket. Schelvis paid €510.736, of which €158.674 of the high Dutch tax. Escaping this car tax is possible by using a foreign license plate – but that would give too much hassle. Fans are excited to see this SuperVeloce cruising through the streets of Amsterdam. A few have even been taken for a tour by Schelvis.

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.

Independent Wholesale Brokerage was formerly known as Oyens & Van Eeghen brokerage, but among traders it has always been known als IWB. Completely unknown by the outside world, this firm is arranging trades between profesional clients and market makers with the use of voice brokerage : talking all day to market makers and trading desks and try to have them trade with each other. By the way, there’s a world of difference between brokers and traders.

In spite of its name, it never has been independent as it always has been a part of the IMC trading firm. Anyway, for some reason IMC and/or IWB decided spin off the brokerage. Even more than than trading firms, a (voice) brokerage firm is completely worthless without the employees. Negotiations were started with the two headed management (Jan Hielco & Michiel) for a classic management buy out. For a price of 250.000 euro they could buy the broker – and the former mother IMC would supply them with a one million financing.

So far so good. However, both managers made a few minor mistakes. First of all, they didn’t ensure themselves of the support of their employees. These brokers are the true fee earners and in general aren’t shy to defend their rights. The second problem was the deal with IMC, nothing on paper nor agreements on a taped line. Remember Alex Baldwin in some movie : A-B-C. A-Always, B-Be, C-Closing. Always be closing.

Anyhow, they threw some unfriendly words to IMC’s boss Wiet Pot who returned the favour and threw them out the building. Fired. When you’ve lost it all you can try your luck in the courthouse. In the legal battle between IWB and the two former managers, the latter have won. Judge decided there is at least some ground for the managers to think they had a deal. And, more important, he felt some pity for them. Going for a management buy-out, and losing the deal, your job and your reputation is a little harsh. The ban on communication on the matter will be lifted. Perhaps a severance package will have to be agreed upon. Guess the fresh independent firm IWB bears the risk to pay their sacked management. To be continued. Court details pretty readable here (in Dutch).

Déjà vu