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.

Scrocca is a a modest market making firm in Amsterdam. It isn’t very large, but everyone seems to like them and they’re probably making money on a steady basis. One could say they are the biggest of the small market makers, or the tiniest of the big ones. They are currently ranked number five after Optiver, IMC, All Options and Tibra. In contrast to the Italian name, given by founder and owner Maurizio Scrocca, it’s an original all-Dutch company. They even decided to have an office in a distant boring suburb of Amsterdam.

It isn’t hot news anymore, but something weird has happened to those guys. They actually bought a listed company from Belgium. Maybe a civilized country, but not exactly the heart of the derivative trading world. Rumour has it they recruited the former All Options head of IT, and he may very well have infected this trading firm. Let’s have a closer look at their take-over target.

Option Trading Company
It’s called “Option Trading Company”. The derivative trading business isn’t renowned for its creative minds. OTC was founded by Pascal Vlaminck and Alexander Franco in 2000. After six years they decided to go for a listing on the Brussels exchange. As far as I can see they issued 2 million shares at around six euros. Twelve million looks a lot, but most of the shares are kept with the founders. The stock even climbed to 24,50 in 2007. With a possession of over 90% of the shares, the Flemish and the French can manipulate the share price as much as they want.

They couldn’t lock their shares in at 24,50. But no need to feel pity for both of them, as they paid themselves a steady dividend. Unclear what kind of bonus schedule they used. It clearly wasn’t sufficient, as their successful traders ran off beginning 2008. New hires didn’t succeed, losses accumulated and everyone was subsequently fired. The move to a new office was cancelled. Maurizio was happy to help. Have a look through their entertaining press releases when you’re bored. Or the Belgian press following this company (in Dutch).

The two board members were the last remaining traders. Not very successful, and after Scrocca bought the company they were told to go fishing. The question remains ; why does Scrocca buy a trading company without any employees and without any significant assets? The empty shell will have probably some tax assets, and of course access to that other major hub of Euronext : Portugal!

Here’s the last chart before the losses started to kick in.

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