That’s pretty fast. Euronext is launching options on Grandvision, the optical retail chain. Stock itself will probably qualify for inclusion in the AEX index next year – depending on how many shares owner HAL Investments will sell in the market in the coming months. After all, they still won 76.7% of the firm.

IPO of Grandvision was exactly one month ago, on February 6th. In a week the options will be introduced, on March 16th. It will be a part of the “spotlight” segment – a kind of fast track for introduction of the options and a with limited lifetime cycle of 1, 2 and 3 months.

Euronext remains very happy with Tjerk Westerterp’s “spaghetti strategy”. Throw all sorts of stuff at the market, and see what sticks around. Saves a lot in the marketing budget. Though this GVN options could be a succes. We’ll see.

The annual Futures and Options World (FOW for friends) event in Amsterdam is coming up shortly. Thursday the 17th of March the conference will be held in the Hilton hotel at the Apollolaan in Amsterdam.

Was especially looking forward to the first panel discussion of the day. Paul Beck (Eurex), Adam Rose (Euronext), Willem Meijer (TOM) and Jasper Anderluh (DeGiro) could be very interesting. After all, Euronext and DeGiro are teaming up against TOM – while Eurex may be the most powerful outsider on the Dutch options market. Never a dull moment.

DeGiro censored, pull presence

Alas, while they’re still on the program flyer at the moment, DeGiro decided to pull their presence. DeGiro was told not to repeat their earlier allegations towards TOM Smart Order Router (SOR).

If you’re not free to talk, you shouldn’t be joining a discussion. A conspiracy theory could link the sponsors of the event to the content of the panel discussion : but no, this does not seem to be the case here.

Reason is FOW Events is scared of possible legal consequences (lawsuits, libel etc) and have a policy of stepping back when there’s a lawsuit looming. This lawsuit will never happen, but you can’t blame FOW for this. Binck lost another expensive lawsuit last Friday against semi-legal asset manager (“for friends only”) Fibonacci. Link (nl).

Derivative trading volume shift to TOM

Still, will be interesting to see the discussion between Adam Rose and Willem Meijer. Adam Rose (Euronext) had to report a boost in stock trading volume in February (+24% YoY), with a shrinking volume on the derivative side. Index options down with -15% and stock options -8%. The options volume has seen growth as well, it’s just not traded anymore on Euronext. It moved to TOM.

Other notable names present at the event will be Remco Lenterman and Albert Menkveld. Will be a promising day – and it’s for the second year in a row followed by the Dutch Financial Services Gala Dinner. For more information contact Ferry Boekholt. For tickets for the whole event find more information over here. But as usual, if you’re in the business you’ll already be invited.

DeGiro is hard to ignore. Every other day in the news in their conquest of new markets and connecting to exchanges.

Latest news is they aim for a takeover of a part of Banco de Madrid. The Spanish bank is in trouble after a bank run and the brokerage part, Interdin, is owned by the bank. Watchdog CNMW is guarding the unit. Clients can’t open new positions. Thing is DeGiro isn’t aiming for a full acquisition.

DeGiro won’t pay one peseta for Interdin. Offices, employees, brand name : not interested at all. The company logo reminds me of some US financial institution.…

The shock of the EUR/CHF move two months ago is a classic. Something you can tell your grandchildren about. Happened the day before the January expiration day – a small reminder to buy back those small short puts.

Today in Der Spiegel a story about a 26 year old engineer. The guy has a nette girlfriend, a well paying job at a medium sized electrical engineering company. Everything fine. Michael Lewis could probably draw a nice profile of a decent regular guy. Only problem is he gambled invested 2800 euro with the CFD shop IG Markets.

Hans Muller, as he is called by Der Spiegel, was caught on the wrong side of the currency move.…

Chris Oomen is the boss of the small insurance company DSW. Not one of the boring pack, DSW is the only rebel in the small Dutch world of insurance. I would switch if it wouldn’t be such a hassle.

Oomen is good for a few bucks, he’s one of the richest men in the country. He earned his fortune with another company he founded a in 1986: Optiver.

Optiverder

With his estimated net worth of €150 million Oomen is a modest investor. His personal holding is called Optiverder, and can be found in the AFM registers with stakes in small caps. In spite of a bull market, his small cap adventures haven’t turned gold. He owns 5% of Grontmij and is facing a loss on this one of 75% (since 2008). He scratched a 5% stake in ICT Automatisering between 2011 and 2013 – only a small loss if he was lucky.

Allard Jakobs

Looks like he decided to follow another icon of the Dutch option industry. Allard Jakobs, used to be of comparable wealth as Chris Oomen. Jakobs is of course owner of All Options, has a stake of 5,27% in the custody bank Kas Bank. Over the past 6 years he has seen an annualized yearly return of 10% on this stock. His stake is currently worth almost €10 million. Handsome profit? Nah, lagging the index by wide margin. Last week Chris Oomen joined ship. Bought a stake of 3.08% in the firm.

No options on Kas

There are no listed options on Kas Bank. Euronext proposed to introduce options on Kas Bank last year, but while other small cap options were fine – market participants turned down the suggestion. With the Altana tragedy in mind, nobody favorited quoting options on a stock with Jakobs involved as shareholder.

All Options itself wasn’t allowed to sign up for quoting Kas options. Euronext didn’t want it, but anyway his clearing (Goldman Sachs) isn’t fond of letting All Options trade Dutch options. ABN AMRO clearing refuses Jakobs as a client.

Disclaimer

Long position in shares Kas Bank.

The engines at Euronext have a reputation comparable with French cars. Unreliable and panne at the worst thinkable moments. In the past years the triple witching hours have been most likely to see trading halts. Recently the market shut down on December 15th and November 27th – but this year we did not experience any trouble. A whole quarter without glitches.

Until last weekend’s system upgrade

Last weekend, the system engineers at Euronext decided it was a good moment for upgrade a router. Monday morning, the derivative markets at Euronext suddenly started to experience trouble shortly after the opening. A short while markets remained operating at half speed with half of the participants in the dark. Ten minutes later the exchange was forced to close the doors.

All derivative trading halted for most part of the morning. Market makers complained about unexpected trade executions while they assumed systems were down and orders had been pulled. Trading has been restarted, but some problems at Euronext persist.

If it ain’t broke, don’t fix it

Until further notice most performance reports from Euronext – usually supplied on a daily basis – have been suspended. Here’s the official explanation in pdf. Apparently Euronext is trying to downplay the glitch – the problems started just after opening instead of 10:10.

Morale of the story is clear. If it ain’t broke, don’t fix it.

Flow Traders has been telling the press their IPO is planned this year “before the summer” and at Euronext Amsterdam. The Telegraaf has been reporting this last weekend (blendle – nl).

It was also the only relevant piece of information, because the journalists have a very hard time understanding what the Flow Traders is actually doing. Not all their fault, as Flow has been posing as a true high frequency trading gem – and they are not. Comparing the business with a racing team (“the car is the IT and connections, the driver is the trader”) seems to be coming straight from Flow’s marketing department (or IPO underwriting investment bank).

Virtu valued at $2.6 bln

The journalists seem to believe the takeover of Nyenburgh by Virtu back in 2012 is a clear sign of increased competition in the ETF industry. Anyway, Virtu is about to raise as much as $314 million with their IPO this month. The stock will trade on Nasdaq with code VIRT – and the whole company would be valued as $2.6 bln.

That’s a bigger fish than Flow Traders. Flow is dreaming of a 1 billion valuation. Not a lot of people believe in such a valuation for Flow Traders. Also for Virtu such a price/earnings multiple of 13 is raising eyebrows. In 13 years most of Virtu’s assets will be worthless. Mechanical Markets estimates a lifetime of algo’s at five years (a good read anyway on the risk of investing in this kind of firms).

Back to Flow Traders. I think Flow is a great company with very skilled and reliable employees. The results in the past have been good as well. Yet I doubt I would sign up for their IPO. There are a few issues.

Flow Traders is earning profits in niche market

Lacking raw speed, the company is mainly making money in niche markets. Speed isn’t the only thing that matters, when you have alpha in the slower transactions. Flow has got alpha. An example of a strategy where speed is less relevant is the trading of ETF’s based on markets in other time zones. Trading the Greece ETF (GREK) in the USA while Greece is closed. Or a Hong Kong ETF in Amsterdam. There’s no underlying market open to hedge your risk.

A risky cash cow.

Flow Traders is a one trick pony

Citadel, KCG (Getco) and Virtu have a lot of strategies in a lot of asset classes. Zerohedge notes most of Virtu’s income these days comes from forex (“global currencies”). Flow Traders on the other hand is a one trick pony. Dangerous position as the competition is fierce. If you lose your edge on your only trick, you’re ready for the abattoir.

Founders cashing out

Virtu raises money for trading capital and eventually buying other firms in a time of consolidation. Flow Traders isn’t raising money to expand their line of business. The founders are selling their shares. No money from the IPO will end up in the balance sheet of Flow.

Flow isn’t HFT

Flow Traders isn’t active as a high frequency trader. There’s no official definition of HFT, but in the business nobody is seeing Flow as a HFT shop. Not necessarily a bad thing – but why try to sell the firm as such? Sure, they will be having fast lines. But they are too slow for competing in the most liquid US ETF’s. Flow has lost the speed race ages ago.

Valuation seems stretched at 1 bln

Without the results over 2014 it’s hard to discuss the valuation. As the firm is looking more vulnerable than many of their peers, a discount in price earnings multiple compared with Virtu and KCG is reasonable. Say a p/e ratio of 11. Would expect a net profit of 90 million over 2014 for such a valuation. Not impossible – we’ll see.

Disclaimer: This post is for discussion purposes only and nothing in this post constitutes advice to buy, sell, not buy, or not sell a security or any financial instrument.

The old exchange Euronext has been releasing monthly turnover statistics every month. This year the number of transactions in the equity market has seen a sharp rise compared with first quarter of 2014. Euronext reported a rise of 29% in traded value.

It’s a bull market, so the same number of shares traded represent a higher value. At the same time there’s more action in the market, the increased value of traded stocks is a result of both variables. Last month the average daily transaction value (ADV) was €9100 million. To be clear, that’s for all Euronext cash markets (Lisbon, Brussels, Paris and Amsterdam).

Option trading moved to TOM

In contrast, the number of derivative contracts traded at Euronext declined with 20% year-on-year. Some days Euronext struggled to keep their markets open, but of course the main reason for the decline is TOM. The index futures stayed at Euronext, but the rest of the pack moved to TOM.

And yes, today TOM reported a 55% rise in contracts traded compared with Q1 2014. It has become the greatest exchange for AEX index options, with a market share of 51% compared with Euronext. The Germans (Eurex) haven’t joined in for Dutch index options. Hence the market share in AEX options is a reliable number.

The overal market share of TOM in the option market isn’t very clear, as they don’t take into account the turnover in Dutch stock options on Eurex. Anyway, TOM claims a 45% percent market share in the first quarter, up from 31% last year.

Spirit of Westerterp alive at Euronext

I believe TOM is also offering the trading of index futures on their exchange. As far as I know, no future ever trades in there. All of the regular future trading stays at Euronext. But of course Euronext also has their share of deserted future markets.

The spirit of former director Tjerk Westerterp is still alive at Euronext.  Don’t spend anything on marketing, just introduce everything you can imagine and wait and see what sticks around. Failures consist of the Southern European Bank Futures. And of course the weekly futures on AEX and CAC. Futures on skim milk powder, sweet whey powder and unsalted lactic butter will start next week (never thought I would ever link to farmersjournal.ie). No buyers, no sellers – but Euronext has high expectations.

Small post on the sisters HiQ Invest and DeGiro – both independent of each other but having the same parent company.

The sinking HiQ

First of all the hedge fund HiQ Invest. Founded by some former AOT traders, they received pretty good press after performing nicely in the first few years. Especially while carrying very low assets under management, some good returns have been reported (2009 in particular was good). Even won some awards a few years ago. At least they still have the pictures.

Year on year loss of 20%

Things have turned for the worse now. Last month the HiQ Invest Market Neutral fund reported a staggering loss of 8.56% in a single month. Norwegian bonds, soft commodities and vol-arb dragged down the fund. Every hedge fund has it ups and downs, but the downs outnumber the ups by wide margin. Over the last twelve months less the fund has seen a loss of over 20%.

Apart from investors withdrawing their money (at 1% cost), such a loss is killing for the fees. HiQ charges 3% management fee and 20% performance fee. But due the high watermark those performance fees won’t kick in in the foreseeable future. What to do? Gamble high stakes to get in green territory again or just live on the management fee? The tone of their monthly report (nl) suggests the last option.

DeGiro isn’t 80% cheaper

DeGiro advertised with “80% lower fees than competitors”. This may be true compared with the former discount broker Binck. However, you can’t be 80% cheaper in everything compared with all rival brokers.

Lynx, an Interactive Brokers clone, decided to take the issue to court. In The Netherlands we have a “Reclame Code Commissie”, an institution where you can complain about unfair commercials. Lynx did and won. The Reclame Code Commissie decided the slogan “DeGiro 100% broker, 80% cheaper” was misleading. DeGiro isn’t 80% but 70% less expensive compared with Lynx brokers (link, nl).

Lynx twice as expensive as DeGiro

Unbelievable. Lynx wants to have attention to the cold fact they are more than twice as expensive as DeGiro. A wet dream for every marketeer. Free commercial for DeGiro.

IMC Financial Markets posted record profits of €165 million over 2014. That’s 30% more than the previous year. Especially the last four months of 2014 have been very good, according to Rob Defares in FD (nl, paywall). The trading revenue was 17% higher with €474 million.

Sharp growth since 2009

An annual profit of €165 million is a lot of money. To put in in perspective, only a few years ago the profits were €28m (2008) and €26m (2009). Since 2009 the results show a structural growth. The profits go up, but the number of employees go down.

Headcount was down from 619 to 581. The firm has bought Goldman Sach’s trading operations on the floor of NYSE – bringing in some dozen Goldman Sachs traders. This suggests a few more employees have been shown the door (apart from the obvious 38). Offices are in Sydney, Hongkong, Zug, Amsterdam, New York, Chicago and Shanghai.

Happy Flow Traders

Flow Traders is preparing their IPO. This kind of results are helping them a lot selling the shares to investors. Not only the profitability, but also the sharp growth rate will get investors interested. IMC isn’t interested in going public. But if they would, it would be quite a price tag for the firm.

Freaking out

If you’re trying to land a job at a firm like IMC. A small piece of advice. For Andreas it has been too late, but if you’re freaking out because of an interview with an IMC recruiter : try yoga. Maybe Tim van der Vliet could help you. But posting this kind of questions on the internet isn’t going to help you. Maybe hard to believe, but really : those IMC recruiters have google as well.

It’s a bull market, jobs all over the place. We’re in the happy days again! Sometimes job offerings tell more than official press releases.

All Options expanding again

From the big firms to the small boutique market maker firm All Options. Boutique is their own term. It’s been a while, but the firm once employed some 300 people after it earned a legendary profit in Altana. In a true Icarus style the firm lost it’s wings while getting loaded with overhead. And crashed. After firing hundreds of people, it’s now appearing to be hiring again. Check.

Market making is not dead after all. Allard has always been the come back kid.

DeGiro expanding in Hong Kong

More jobs for you. Apparently the broker DeGiro is planning expansion in Asia. They’re recruiting in Hong Kong. Check. It’s amazing how fast they want to roll out their business, given the regulatory burden in every single country. It’s more fascinating to conquer the world, than getting the details right. Still no such thing as option combinations at DeGiro. No order confirmations by mail.

ATG starts bodypump classes

You may call it a coincidence, but shortly after DeGiro opened shop in Hong Kong and started recruiting, this trading firm ATG (Algorithmic Trading Group) expanded operations from medium and high frequency trading to giving Private Bodypump Classes.

I’m old fashioned and don’t have a clue what it is, but everyone is invited today in Pure’s Red Bar. Defensive move. ATG is a firm founded in the same year as Virtu (2008) – but hasn’t got the ambition to go for an IPO. If these former IMC traders at ATG change their minds, you’ll read it here first.

MATTHEW HOYLE MARRIES

Hong Kong based Amsterdam floor trader turn Financial Markets headhunter Matthew Hoyle tied the knot in a civil ceremony in England. The UK born Dutchman will marry this weekend in this castle hut in Ireland. More than 100 guests from all over the world are flying in starting today.

Congrats to Mr and Mrs Hoyle!

Yeah, they got him. The guy who single handedly caused the markets to crash, armed with his excel sheet and some spoofing algo’s. Most people in the market are sceptic.  This post by Adrian Ip is one of the best reactions I’ve read. Everything below is written by Adrian (who works for Thomson Reuters). Original source is here.

I was pretty surprised this morning to read about the arrest of a London based futures trader for allegedly causing the infamous flash crash of 2010. I immediately downloaded the publicly available criminal complaint to have a read of the detail (available here).

For those that don’t know, this type of stuff holds a special interest for me as prior to TR I worked for companies selling, designing, building and supporting highly automated low latency derivatives trading systems (yes, I know, I’m the devil), which we licensed to companies to trade with. I’ve got many years experience in investigating strange market patterns and designing systems and algos to both combat and take advantage of these conditions so I have some understanding of the situation.

A few things stand out to me on initial reading of the news stories and the criminal complaint itself:

• A lot of this seems focussed on the fact that Sarao had a system which automatically placed buy and sell orders at varying price points in given contracts (layering).
• There is also mention of spoofing which takes many different forms but ultimately means an order being placed with no intention of actually executing. Difficult to prove since there are so many reasons you may want to have a system change or cancel an order under so many different circumstances.
• Activities such as layering and spoofing are standard procedure to a certain extent and the definitions vary.
• Trading systems automatically moving prices you have in the market is nothing new or bad.

HE LAYERED! HE SPOOFED! MARKET MANIPULATION! GRRR!

Honestly, I don’t get what the big deal is. Layering is an EXTREMELY common activity in the market. Imagine you’re a market maker. It’s your job to provide liquidity to the market. You make your money by taking the tiny spread between people who want to buy from you and those who want to sell to you. You’re probably making markets in more than one instrument or underlying because the amount of money you make from each lot that you buy or sell is small. In traditional terms, it’s the stack ‘em high, sell ‘em cheap approach and you’re not a long term positional research based trader so you aren’t up on all the latest news and rumours regarding all the companies you quote.

Now, what happens if somebody out there is trying to build up a large position in something you quote? Maybe they want to buy a few hundred shares and that’s not a big deal, but what if they want thousands? Hundreds of thousands? Millions even? Chances are they have a better idea than you where the market is heading. If they’re looking to buy so much, maybe the value is higher than you know? Wouldn’t you want to be wary about selling so much of something when normally you only trade a few thousand lots? This is a typical defensive strategy employed in the markets to deal with such scenarios. Nobody knows everything, you need to protect yourself for when someone perhaps knows something material which you don’t, as such, you layer your prices.

People who quote extremely tight spreads take the most risk that the price they have posted is out of date and they’ll lose money, this is why the majority of volume in a given contract is available at prices worse than the best bid or offer (BBO). It’s also why people use automated trading programs to shift their prices when the market moves as a slow trader won’t be a trader for long as they’ll lose all their money.

The criminal filing is odd. Page 21 of the document states “SARAO’s Manipulative Activity Contributed to the Flash Crash” and then goes on to describe trading activity which thousands of firms employ globally on a daily basis. It’s no secret that market makers, hft, algo traders etc benefit from volatility and I know other companies also made a lot of money on that day. It doesn’t mean they were illegally attempting to manipulate the markets. Automated systems have so many capabilities to do things, sometimes they do stuff intentionally, sometimes not, just look at Knight as a perfect example of an algo gone wild costing a firm almost half a billion.

Really I’m surprised that they’re looking to pin the flash crash on one person. I remember years ago having a conversation with one of my old CTO’s and remarking that the system we were building was one which would one day contribute to a global financial meltdown and he agreed. Perhaps Sarao did contribute to the flash crash, but so too did a hell of a lot of others. The focus should be on creating a better system, not on looking for a scapegoat. I’ll be following the case with interest.

A true take over

Suddenly they found a large Taiwanese financial conglomerate, the brokerage Capital Futures. The firm Capital Futures is a listed company (market cap $120m), and their major shareholder is Capital Securities (market cap $1bln). Nobody said capitalists are creative in naming their firms. True announced last Monday April 27th the merger with Capital Futures. The combined entity will continue under the name Capital True Partner.
Everyone knows mergers don’t exist in the real world. Ralph van Put sold his firm.

A true salesman

The CEO of True Partner is Ralph van Put (his real name). Once upon a time he was an option marker maker in the open outcry era, and he founded trading software firm AtomPro. Was sold to Saen where he got CEO. After Saen lost their shirt on the Volkswagen squeeze, Saen was sold to All Options. When All Options got into trouble, Van Put was heading the Hong Kong office. He managed to buy it from Allard Jakobs for €0.3m.

He cut back on the expenses, ditched his Bentley and accepted a position at the Chinese university of Hong Kong. Last month 51% of the software development unit in Chengdu was sold to Capital, this time the asset management unit was sold. Plan is to introduce more hedge funds for customers in mainland China. Anyway, without knowing the financial details it definitely looks like Ralph has made a great deal again.

Last month HIQ Invest Market Neutral Fund lost an astonishing 12,1%. That’s even worse than the month of March (-8,56%). Losing over 20% in two months is nothing short of a disaster for hedge funds. The results over 2014 haven’t been very positive either (-15,62%). Troubled times ahead for the sister of DeGiro (same owners).

Always look on the bright side of life

However, management looks on the bright side of life. Less is more. The fund has seen investors taking the money from the table – and combined with the losses the fund is a lot smaller than it used to be. Which is great in opinion of the fund managers. After all, a small car is easier to drive.

Less money, less problems. Easier to generate a little profit with a tiny fund. Strategies which only work on a very small scale suddenly make sense again. Income from “market making” activities are also limited to a fixed yearly sum. With the lower assets under management this is getting significant. Could be, but even with the astronomical 3% managed fee, a certain critical mass for hedge funds it required.

Hiring traders again

Other news is they’ve got a million from their own money to hire a few human traders. Because this electronic automatic trading didn’t really work out. Maybe it’s not too late to try something completely different. Their monthly news letter can be found here (nl).

Better results at Done Capital

It’s easy to poke fun of losing hedgies (office furniture anyone?). Good news is less interesting, but as a kind of compensation check out this hedge fund Done Capital. I like their website, and one of the managers is Iain Somers. Once the guy who hired the HIQ managers at AOT, and nearly a decade ago he did his homework in famous a Getronics corporate action. Not surprisingly, their results are a lot better.

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Time for the famous Financial Football tournament. Saturday June 6th the event will be held again. As always the 7-a-side matches will be played just outside Amsterdam in the little city of Abcoude, on the fields of FC Abcoude.

It’s amazing the tournament has never been skipped in the last twelve years, somehow Bennington (Ferry Boekholt) has been able to find sponsors every year (remember it was once called All Options Football Tournament?). The sponsors this year are Euroclear and Eurex.

Sunny weather, a kidsclub childcare, food, beverages and an overall good atmosphere : get the teams together again. The event has evolved from a few local market makers into an increasingly international tournament. Last year it was Lynx winning the title after beating Eurex Frankfurt on penalties.

The contribution this year is €600 per team. You can find more information here, don’t hesitate to contact Ferry directly  if you have any questions.

The 13th edition

Made a list of the past winners of the tournament. Somewhere along the way we’ve made a mistake in counting the edition of the tournament. This year isn’t the 12th edition of the tournament like it is called in the official invitation, it’s the 13th. The tradition is even older than we thought.

Half a year ago I reported on the clash between DeGiro and Binck, with respect to the not-so-smart order router from TOM. See DeGiro trashes TOM and Flash Boy Binck ignores law of holes. Few months later TOM decided to shut down their stock trading venue. Assumed that would be the end of the story.

However, great news! Radio show Argos  (nl) got interested in the matter. Somebody read a book from Michael Lewis, and without prior knowledge about the stock market they started investigating. Had a coffee with both of them, and to be honest the result looks good. They managed to get a story about HFT trading even my mum will understand. See below for the radio show with “visuals” on youtube. It’s still only in Dutch, understood the English subtitles will arrive next friday.

So, whodunnit?

The stock market is a strictly anonymous game. Still I’m pretty certain to know which HFT shop managed to jump ahead of Binck’s retail flow. First of all, you need to have raw speed to be able to do this kind of arbitrage. Second, my friends at IMC and Optiver confirmed me they weren’t involved in this. Someone else also suggests both of them are lacking experience and manpower to do this game. It’s mainly an American game. That reduces the number of suspects.

Marginal business

There a many US high frequency trading shops active in Europe. Tower, LaTour, Spire, Hudson River, Citadel to name but a few. Only one is active in Europe with a real significant trading team with a group profit and loss. Other firms with smaller outfits in Europe aren’t active in this kind of marginal business. We’re not talking about a cash cow here. Also looking at TOM’s member list at the time, one suspect remains. Though the member list isn’t saying everything, sponsored market acces is possible.

Everything points at Virtu

Everything points at Virtu. Yes, the very same firm who did an IPO in the meantime, after postponing it earlier due Michael Lewis’ book “Flash Boys”. The controverse coming from the book about the HFT firms blocked the first IPO attempt. However, Virtu would never comment on this and nobody will be able prove it. In the meantime reliable sources are confident it was Virtu.

Latency arbitrage is fine

No matter what politicians said on the radio, latency arbitrage by firms like Virtu is perfectly legal. Selling on TOM and rapidly scalping on Euronext is fine. Or other way around. Every trader would do exactly the same. If you can sell a stock on venue A and buy it back at a lower price on venue B ; money in the pocket. Just the speed makes it different to grasp.

The problem has always been TOM’s order router which couldn’t handle large orders. And they made a promise they couldn’t keep. There’s nothing in it for them to do it on purpose.

Back to Argos

The journalists, Hansje van de Beek and Stefan Heijdendael, managed to have some high profile US experts look at the discussion. Eric Hunsader and Brad Katsuyama himself checked the trading tickets and confirmed it looked exactly like Michael Lewis’s book Flash Boys. Nothing new here, except for the fact they managed to get other people react.

TOM stock venue is gone

Binck responded in a classical silly way (nl – something like ‘we are not HFT, DeGiro is because HiQ is HFT!“). Anyway, the TOM stock market is closed so everything is a little bit an academic discussion. A thing of the past. The TOM option market is still alive and kicking, and as far as I can see it works as precise as a Swiss clockwork. No HFT is taking advantage of option orders on TOM.

Radio with visuals

Euronext will introduce options on Bill Ackman’s hedgefund Pershing Square. His hedgefund did an IPO on the Euronext Amsterdam last October. Can’t remember why exactly he decided to go for Amsterdam. Maybe wanted to open the exchange during his holiday trip.

As of May 29th options on Pershing Square Holding will be open for trading.

Options traded in US dollars

The Pershing Square stock is traded in US dollars. This means the options and strike prices will be traded in US dollars as well. However, it remains to be seen whether market makers will provide liquidity in these options (code PSH). Susquehanna will sign as usual, but can’t be called a committed market maker. Risk of empty screens.

Hedging your hedgefund stock with options sounds overly cautious. I bet good old Carl Icahn would be very interested in building positions in Pershing Square options.

• Details from Euronext here

Effective today, TOM will give free access to their real-time derivatives market data to clients of Interactive Brokers and the Dutch brokers working with IB’s platform (Lynx, Todays, Traders Only). Other brokers already offered the data for free. According to the press release, investors can save as much as €37 per month. Nice – but it’s not entirely true.

Some newspapers are happy broadcasting press releases, no questions asked (nl). In reality, nobody ever paid for TOM’s market data. It came for free with Euronext’s data.

Regular investors may save €2

Regular investors will pay €2 a month for Euronext data bundle at IB. You’ll be able to see the order book for stocks and the best bid/offer for derivatives. Only if you’re interested in the depth of the order book for derivatives, you will have to shell out €37 euro a month. Most investors who are happy with best bid/offer prices won’t save a penny – although theoretically you can use free Chi-X stock market data and ditch Euronext.

Previously TOM market data was bundled together with Euronext Data Bundle, for free. Now it’s possible to switch off Euronext and work with free TOM market data. We’re not talking about a lot of money – but the small move could tip the balance in favor of TOM. Investors from abroad (without the Euronext bundle) can easily do a few trades on TOM without having to sign up for additional market data.

Fees unchanged

The fees for option trading at the exchange did come down a lot. Most of this has never been passed on to investors, unfortunately. Brokers like Binck and Alex are determined to keep the extra margin in their pockets. To attract real flow from Interactive Brokers, TOM should convince IB them to pass through the lower fees. Really, for a few cents reduced fee the whole pack will switch.

The list of top 100 rich young Dutchies is out again. Compiled by the magazine Quote, they have assembled a list of the most wealthy self-made folks under 40. Not surprisingly, a lot of football players and DJ’s on the list. And of course a few traders. Familiar names, most of them mentioned earlier on this website.

Well done fellas. Everyone can imagine people are missing on the list, but you need a serious bonus to survive the tax and keep a net worth of 5 million.

Ivo Geijsen (IMC) – €14 million

Head of algo trading in the Chicago unit of IMC Financial Markets. Received a $6 million bonus over 2012 and $10.8 million in 2011 – this estimate of his net worth seems to be on the conservative side. Lives in a tower on the 68th floor in Chicago. Aged 34, this means the coming six years he will remain on the Quote list. And great news, he will marry Bridget (also from IMC) this summer in Amsterdam. I’m not invited (yet).

Pim Bertens (Binck) – €12 million

His last year on the list, as he’ll be turning 40 this year. Earned his fortune on selling his stake in Binck. Currently he’s one of the partners behind hedge fund Mint Tower Capital Management (aum €125 million). Also manager of Jeroen van Inkel and having a new venture with drones (“Columbus Aerial Solutions”).

Bram Bastiaansen (ACT) – €11 million

Amsterdam Capital Trading, ACT, is active as trader in environmental commodity markets. Also expanded to the USA, where ACT started an office in San Francisco. Cashed after selling a stake in their firm to Antea Participaties.

Jaap Jansen (ACT) – €11 million

Same story as Bram Bastiaansen.

Robin van Boxsel (IMC) – €10 million

The guys at Quote forgot Robin last year. But always happy to help them out (you’re welcome). Anyway, Robin van Boxsel earned his money at IMC in Chicago and Amsterdam. Left the firm two years ago. Founded asset management company Independent View with some other former IMC traders, in Amsterdam and Zug. They need a new website, though.

Sebastiaan Koeling (Optiver) – €8 million

Managing Director Optiver USA. Started as a derivatives trader, promoted to arbitrage unit and head of trading Europe before finally moving to the US office. Profile here. His house in Chicago is for sale at the moment ($4 million).

Maarten van Amstel (Optiver) – €7 million

Earned a nice fortune at Optiver, left the firm to start his own trading firm. This firm, UTR8, is located in Utrecht. They are hiring at the moment. Be patient, their website is terribly slow.

Alco Pieren (Optiver/Tibra) – €7 million

Left Optiver to join Tibra. The move created some legal problems, but everything as been sorted out. Left the trading business altogether, and is investing in real estate. Bought a street in a tiny village in the south of the country with his investment firm Hof Capital.

Robin Luijer (Optiver) – €5 million

Earned his millions at Optiver. Left the firm in 2010. Probably one of the very few guys having three years as “unemployed” listed on his linkedin profile. Together with Marnix Hoefnagel (former Optiver COO) he started a charity organization :  “de StudieArena“. Helping children with their homework. Respect.

Simon Soet (Optiver) – €5 million

Earned his fortune at Optiver, mainly as head of Delta1 between 2008 and 2012. Moved back to the north of the country to retire.

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