All Options says it’s (still) not fair
Getronics old option contracts
Getronics used to be a Dutch IT company with normal listed options tradable on Euronext. After a claim offering, the options were split in the standard GTN options (with block size 100) and the small GTO with block size 12. So far so good. However, the stock traded at pennystock levels and the board decided to go for a reverse stock split. Seven old shares would be melted in one new Getronics share. The options would be adjusted as well, the block size would be divided by seven.
This is were the fun started to kick in, especially in the GTO options with the small block size The new blocksize would be 12/7 = 1,71. This would of course be rounded up to 2. Compared with the normal Getronics options the block size would rise 16%. A different block size has some consequences for the price.
Someone did his homework
Enter Iain Somers. A clever dude trading for his own account at a small firm (Market Wizards). He bought 1200 deep ITM puts through a broker. He paid more than parity. Most sellers were happy to take a profit, but scratched their heads and checked Euronext’s policy. This ignited a buying spree of this put. At the end of the day, most traders understood the point. All Options, however, kept on selling without asking questions. They sold exactly an astonishing amount of 76.100 deep itm puts.
That’s a lot, especially because after the adjustment in line with the Euronext rules, the price of this put increased from 16.55 to 19.35. Even with a small blocksize, that’s a 2.55 million loss for All Options.
What’s new in 2009
Four years later this story isn’t dead and buried. After losing a first encounter in court end of april 2005, All Options started new procedures. Recently court issued a preliminary statement on the matter (in dutch). The surprising opinion of the court seems to be the exchange should compensate All Options a little bit for the loss. The level of compensation is still unknown, but court ruled the exchange should have halted trading for a while and inform poor little All Options how the rules would be applied. This court decision is not the end of the procedures. It will take another four years I would guess, as appeal is possible for both parties.
die kerel bij market wizzards heet ivan
kom op AOI…hap nou even op dit bericht
Market Wizards should've traded it bigger. Now they made 40k.
Van jou, 2:11 PM
Ian is volgens mij zijn naam, je verwart hem met z'n collega Ivan uit hun AOT tijd. Hij had het wel wat groter opgezet naar ik heb begrepen (bij lange na niet zo groot als de tegengestelde positie bij AOI), maar andermans boeken blijven duister nietwaar? Sindsdien niet meer zoveel gehoord van Marketwizards. Daarvoor eigenlijk ook niet … Eendagsvlieg?
not a one-day-fly, just limited positions and no prof markets. Guys trade with 100% own money and 100% bonus, so they're happy with smaller netliqs. Some trade from the FC Den Bosch stadium.
Wat loopt die kleine gnoom nou nog steeds te zeiken. In Duitsland (Altana) flikte hij precies hetzelfde geintje.
in de regels van euronext staat ook dat er een cash settlement plaats zou vinden om men te compenseren voor de afronding. Dit gebeurde dus niet. Euronext bleef vol houden dat alles volgens de regels afgehandeld zou worden…
it seems like this all options kerel has blown up a few times…. can anyone provide more detail on this please…
First time he blew up was with "Goed Gedaan Opties" around 1998 … if memory serves, ING clearing took a hit of some 50 million guilders on that. Thereafter he founded All Options. Until their big win in Altana (2007) AOI was marginally profitable, and the Getronics incident two years earlier wiped out their profits for the year. Presently many market participants are predicting that AOI (i.e. Jacobs) will blow up again sooner or later; the added overhead of the Saen operations won't help in this respect.
I am not familiar with the Euronext rule book, but having read the preliminary court ruling, I find it hard to believe that there would be some sort of cash settlement to compensate for the rounding error. The basic gist of AOI's legal argument was that the ratio method is unfair and should not have been applied. I didn't read anything about a claim towards Euronext w.r.t. a cash settlement. I'm with Trader Jack on this one: AOI having been arbitraged by its competitors and then crying foul like a little baby.
With "Goed Gedaan Opties" mister Jakobs failed on a large spread Arnhemse / AKZO. The spread itself made sense, but it was too big for him to handle. Believe ING made a serious profit on taking over this position after a while.
ongelooflijk hoe vreselijk stupide sommige amsterdamse marktpartijen zijn. In fucking credible eigenlijk
bizarre how Allard went all-in without questioning the motives of the other party, but also bizarre that the board of a company can so easily create value in these synthetics. Basically, anyone being dividend long in these series pre-statement was given a 2.8 euro gift at the cost of the counterparty. That's just wrong, especially considering the company went downhill spectacularly afterwards, and dividend long would have been a bad bet otherwise.
You didn't get a 2,8 euro gift, but a 16% higher value. Dividend was already at zero. Would've worked too for itm calls if they had existed..
I heard there were some big problems last year with some german financial stock(s?) too.
Volkswagen rumour was wrong !
yep, it was the volkswagen-porsche 'pair'-trade 😉
so you wouldnt advise trying to get a job with saen or all options…..
no, but even if you tried – they don't hire people with lts-zwakstroom 😉
thanks
With LTS-zwakstroom you're very welcome at Van Der Moolen. You'll be manager in a few months…
and at all options…. i would be the ceo, right…
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