amsterdamtrader — Tibra

Posts tagged “Tibra”

Searching a job as market maker

Written by Jack. Posted at 11:41 am on November 9th, 2009
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

Posted at 11:41 am on November 9th, 2009. 231 comments... »
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Bid-ask spread tightens in option market

Written by Jack. Posted at 10:19 am on April 26th, 2009

Before the outbreak of the crisis, the world of derivatives was as exciting as a the running episodes of Sesame Street. Some minor changes, but basically every day the same. Press releases could be copy-pasted from the previous month. Volume of traded options went up, and bid-ask spreads went down. This has all been ruined by the uninvited partycrasher called “the creditcrisis”.

However, there is a little surprise here. According to Alan van Griethuysen, director of Euronext’s derivative trading, the bid-ask spread of options have actually shrunk over the last year. With lower volume and higher volatility swings this sure sounds like an unexpected fairy tale. It may be true the spreads have become tighter on average, but he obviously didn’t mention the quote size. The size on the screens are probably lower than before, and the tradable size in the broker market has definitely left the building. So are the brokers, who are facing a difficult times.

Mr van Griethuysen cheered on the comeback of the small trading firms. Klinkenberg, 323 and Nino are mentioned in the papers, as well as the new primary market maker Tibra. Here’s another thing Van Griethuysen forgot to mention. The valuable liquidity providerships are slowly evolving into a commodity. All option classes started back in 2002 with only three primary market makers responsible for quoting all series. Right now new licenses are introduced every year and now six (or even seven) primary market makers exist in almost all stocks. Van Griethuysen has opened the door, and turns surprised when traders actually walk in.

Posted at 10:19 am on April 26th, 2009. 24 comments... »
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Play-off for market makers

Written by Jack. Posted at 10:31 pm on April 11th, 2009

Twice a year Euronext is auctioning licenses for market makers in options. The market makers don’t have to pay for the right to send their quotes, they just have to fulfil their duty. The right to send quotes to the market is granted to the market makers who commit themselves to the tightest bid-ask spreads.

As these ELPS schedules are invariably set at the tightest quote settings, all market makers bid for the same conditions. The good part is that existing market makers never lose their license – as long as they are able maintain good quotes in the market. So no big changes over here. The big three (Optiver, All Options, IMC) will remain the dominant market makers. In a few places a new place for a primary market maker (pmm) will be created.

This is where the fun starts to kick in. For the new places market makers will have to fight for their right to quote. In Philips and SBM Offshore the best of the rest will have to send their tightest quotes for two consecutive months. Points are awarded for market presence, size and the tightest bid-ask spread.

Once the primary market maker license is granted, companies will have to keep on performing well or they may lose it next year. This is what’s treating Curvalue, part of the listed company Van der Moolen. It will have to defend its positions in Unilever and ING against eager beavers 323 Trading and Tibra.

The losers still can trade, though. A competitive market maker (cmm) can still send quotes, just a lot less and with less bandwidth. Because of the standard 5 cent tick size the quoting permissions are important.

The play-offs:

ING
Curvalue plays relegation battle against Tibra Trading.

PHI
Tibra and 323 compete for the new spot

UN
Curvalue plays relegation battle against 323

SBM
All Options and 323 compete for the new spot

Hard to predict who’s going to win. Curvalue seems to be in trouble, 323 is very small, Tibra still unknown and All Options may not be very serious on SBM. Time will tell.

Posted at 10:31 pm on April 11th, 2009. 15 comments... »
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