Optiver, also known as Dr. Evil
With all the juicy news on the demise of Van der Moolen and its surrounding scandals, one tends to forget about the rest of the market. One of the major derivative trading firms in Amsterdam is receiving a lot of attention in the press lately. Optiver is depicted as a black sheep. While I wouldn’t trust them to team up with any retail broker, it’s hard to imagine them as crooks.<
div style=”text-align: justify;”>Back in 2007, even before the outbreak of the financial crisis, Optiver allegedly manipulated the oil price in Chicago. One year later the firm was charged with manipulating oil prices by the Commodity Futures Trading Commission. Another year later, yes – in 2009, the firm is receiving a snowball of attention. Most prominent has been the New York Times in this story by Landon Thomas.
Old news
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div style=”text-align: justify;”>Basically, it’s recycling of old news. The current climate has shed a different light on the matter. Especially the fuzz about high frequency trading (also known as HFT) makes it a whole new story. The link between high frequency trading and manipulating a liquid market remains unclear to me. As far as I know, deep pockets are more relevant than speed in “bullying” the market.
Consensus seems to be Optiver is masquerading itself as a liquidity provider, while in reality it is a proprietary trading firm. And that’s bad, according to Fund My Mutal Fund and Zerohedge.
The Hammer to fall
<
div style=”text-align: justify;”>Another curious thing is the focus on the name of the software. Internally developed software can have any name, it’s not used for any marketing purposes. But the Optiver engineers have managed to create a wonderful name : the Hammer. The software of the Australian part of the firm is called F1. All this creativity reminds us of the Citigroup trading scandal which shocked the euro bond market in 2004, using software called Dr Evil.
Liquidity providing with a Hammer or Dr Evil. Bad idea.
AOT's internal software was caled The Smacker. It smacked them right out of the market. IMC's is called Jippy, after one of the boss's first Internet Ventures.
VDM's software is called "jail house rock" or was it "invisable"
Cannot see what all the fuss is about. Seems to be about certain American daytraders bitching because an "overseas" firm is making money at their expense. Do these people seriously think that market making (aka providing liquidity) should be a free service? And do they believe that those trades which invest money in faster execution and price feeds and designing complex algorithms are trading on inside information? This may be expensive but ANYONE can pay for it. So, the price is prohibitive for smaller players which gives the advantage to the bigger guys, well that is just the nature of the business, always has been and always will be, I'm afraid.
It is like two traders, one of which uses Yahoo Finance for his price feeds aand the other pays $1500 a month for the Bloomberg. And the guy who uses Yahoo starts crying and accuses the guy with Bloomberg of being an inside trader because he has faster feeds than him. lol.
The market-making software at AOT was called:
Turtle . . . . . .
Teenage Mutant Ninja?! 😉
optiver will get atleast $20m fine for this oil trading. its not for what they were doing (lots of groups were playing this game), but its the fact that they lied about it. In the US they will be made an example of.
$20m is small change for Optiver
ja, 20m is small change if you think they have reserves – but they've got huge overheads, there's no volume, and thye have paid out everything on bonuses – 20 mil wil not be shrugged off so easily. But hey – they're going to dismantle Tibra in court. Tibra is history.
its 20mn minimum – possibly 50mn
Poor Tibra…
Optiver has to try to win in court because elsewhere they can't. When they don't make any money in the oil-market they bring up 'the Hammer' to manipulate, and when they can't compete in option-trading they invent TOM.
Try to win in court, because Tibra ripped them off of their software codes…
Tibra has grown as big in 3 years as Optiver did in 20. In 3 years time it will be Optiver who are history (like IMC, Saen, VDM, Curvalue and soon to follow All Options). The Dutch model is dead!
50 minimum – possibly 100mn
100 minimum – possibly 200mn
200 minimum – possibly 1 billion
…
or am i just a wanker making up numbers
Dutch model is dead… sure!
only during floor-trading Anglo-company's could compete with the Dutchies.
Tibra ripped them off… Optiver is ripping of everybody!
15th of Sep for the court case, very exciting whether anything holds up!
999999
Jaja ik had em!
Nothing will hold up
by "Anglo-company's" you mean companies like Mako and Liquid, I guess? One made 140M in fixed income last year whereas the other made 50M every year in Eurostoxx options. The london firms have moved to higher things, like trading size with the IDB brokers. The Dutch do not understand risk-based pricing and are content with trading 100 lots on screens in shitty stocks no one cares about anymore. And they need to invest 10M to 20M a year on systems every year just to keep up. Pointless.
go to Dante's
nah… just VdM and other crap in that pub
all opt are in herengracht
Funny to say non-Dutch is future – US may be future, but Tibra was founded by guys who learnt their trade at Optiver. And, who it seems took more than just their 'hands on' skills with them when they left… ha-ha. The original name of Tibra was NFD = No F*cking Dutch. If they lose in court they're well screwed! If I was in Tibra – I'd start updating my CV asap…
I think you will find it was FTD. I'll let you work out what that means, dumbwit.
Fellatio Traders, Duhhh?!
Yeah Anonymus, the Dutch model is dead indeed. That's why Optiver had only more than half a billion in trading profits last year; very disappointing and it really shows that the end is near….
half a billion in profits…..sold…..yours…..an youw…..
'aan jou' it is
Optiver boys:
What is your market on the Hammer/Tibra spread in terms of damages awarded?
I reckon you are going to net lose big time.
I did not say 'profits', I did say 'trading profits', which does make a significant difference considering the huge overhead these days.
Especially the overhead VanderMoolen carries around. AMS-NYC-AMS 750 times a year business class + Ritz Carlton or wherever they stay + their legendary nights Out in NYC… Richard you are going to be nailed…
more like first class! RDD wouldnt fly business !!
The Optiver/Tibra hearing was set down for the 15th wasn't it? Anyone heard how it went down?
Do the courts down there release transcripts?
You can order transcripts for a fee, but you can see what orders have been made here – https://www.comcourts.gov.au/file/Federal/P/NSD681/2009/actions
Ha! Optiver have been told to go back and re-state their case! Which is weird because it looks like they've already amended their claim before (after the August hearing).
Live score: Tibra 1, Optiver 0.
I would just want to say that Tibra is really not a ethical firm, it is a shame to work for them. Even if they are making loads of money, no one..not money people will respect them…
Why are they not ethical?
cus they stole optiver's software to make money?? maybe im wrong…..i dunno, just feel it is not ethical or something that i would do.
I think you have it ass backwards. See there's this thing called "Presumption of Innocence" where from a legal standpoint, the defendant is innocent until proven guilty.
There's also this other thing called "Libel" where if you make false statements that cause damage the reputation of a company you can be imprisoned (in extreme cases). You say you work for Tibra – I wonder if I sent your comment to some friends of mine there they might be able to figure out who you are?
I'm sure they'd be happy to know one of their employees is spreading these sorts of rumours on the net. You might want to start looking for another job, dimwit!
lol
they will find him by the type of font that he uses…
too stupid to be true
wondering how would your friends be able to figure out who i am if i was working at Tibra?
i never say i work for them (i wish i was). i just said it is a shame to work for them.(sorry my english sucks). never intend to hurt anybody. that was just my personal view….why so serious……
sorry to everyone, sorry to Tibra.
if you posted from your work pc they could probably look at the computer logs. i think i would take it pretty serious too if i was accused of stealing something that i didnt take 😛
go ahead mate…
getting ip outta blogspot might be little troublesome
not mentioning tracking it down
but who cares, optiver is after them…
it reminds me of a joke
Cessna: Uh, ATC, verify you want me to taxi in front of the 747. ATC: Yeah, it's OK. He's not hungry.
atc – air traffic control
and mako and liquid have better trading systems and quants than all teh dutch companies
28 september 2009 | Het Financieele Dagblad
Door: Conijn, F.;Brinker, G. den
Gijs den Brinker en Frits Conijn
Optiver, de grootste en de meest gesloten optiehandelaar van Nederland, geeft een zeldzame blik in de keuken.
Amsterdam
Duizend computers zoemen achter een transparante wand op de tweede verdieping van het kantoor aan de Amsterdamse Zuidas. De plastic muur verschiet continu van kleur. Rood betekent dat de computers veel handelen en op hoge toeren draaien. Blauw is een teken van relatieve rust.
Johann Kaemingk, mede-oprichter en voorzitter van het wereldwijde managementteam van Optiver, wijst naar een grote rode vlek. 'Er gebeurt nu kennelijk iets op de Duitse beurs', zegt hij.
Kaemingk, die Optiver in 1986 startte met f 500.000 van familie en vrienden, geeft nu voor het eerst een interview. Naar eigen zeggen omdat hij niet anders kan. 'Door de groei van het bedrijf en het toegenomen belang van de bedrijfstak is het niet meer mijn eigen keus om naar buiten te gaan.'
Optiver zoekt de publiciteit omdat de sector onder vuur ligt. Het verwijt is dat 'high frequency traders', handelshuizen die met geavanceerde computermodellen en hoge snelheid op beurzen handelen, de beurskoersen grilliger maken. Eindbeleggers zoals pensioenfondsen en particuliere beleggers zouden de dupe zijn.
'Wat je over de sector leest, berust niet altijd op de waarheid, maar het heeft wel een grote impact', zegt medebestuurder Jelle Elzinga van Optiver.
Dat er misverstanden zijn over 'high frequency'-handelaren, hebben deze bedrijven deels aan zichzelf te wijten. Met hun geheime handelsstrategieën opereren ze het liefst in de luwte. Pottenkijkers zijn doorgaans niet welkom.
Het gaat zelfs zo ver dat de meeste van dit soort ondernemingen in Nederland de jaarstukken niet of te laat deponeren. Maar die traditie heeft Optiver laten varen en dit jaar deelt het bedrijf het verslag over 2008 zelfs ongevraagd uit.
De nieuwe openheid voelt wel onwennig. 'Zorg er wel voor dat de schermen op de foto onleesbaar zijn', zegt Kaemingk als hij en Elzinga zich even later laten fotograferen in de hypermoderne dealingroom van het bedrijf. Concurrenten zullen niet nalaten informatie over hun handelsstrategieën tegen Optiver te gebruiken. 'De concurrentie is moordend', zegt Kaemingk. 'Het past niet in de Nederlandse mentaliteit dat je elkaar helemaal afslacht, maar het speelveld is al lang niet meer aan landsgrenzen gebonden.'
In de dealingroom zitten handelaren en softwareontwikkelaars van 33 verschillende nationaliteiten achter muren van gestapelde computerschermen. De dresscode is casual. Sommige handelaren, die in een goed jaar meer dan een miljoen verdienen, trekken 's morgens het liefst een trainingsjasje aan.
Het zijn deze hoogopgeleide mensen die continu speuren naar verbanden en patronen die geld opleveren op de beurzen. 'Het kan het verschil zijn tussen twee beurskoersen van hetzelfde aandeel. Maar het kan ook gaan over patronen tussen dertig verschillende derivaten', zegt Elzinga.
Het afgelopen jaar was voor Optiver een topjaar. Het bedrijf verdiende met vijfhonderd man netto bijna euro 300 mln. Het feit dat de beurzen verleden jaar bijna halveerden, was geen belemmering. Integendeel, door de onrust op de financiële markten waren de inefficiënties waar Optiver het van moet hebben juist groter dan normaal.
Hoewel sinds de start in 1986 geen enkel jaar verlies is geleden, ging het niet alleen maar in een rechte lijn omhoog. In de tweede helft van 1998 werd bijvoorbeeld niets verdiend, omdat de computermodellen tijdens de Azië-crisis niet bleken te kloppen.
De val van Fortis precies een jaar geleden was ook een spannend moment, omdat de miljarden aan handelsposities voor een groot deel bij de bank staan. Als de Nederlandse en Belgische overheid niet hadden ingegrepen, waren deze posities bevroren. Kaemingk: 'Dat had ons makkelijk euro 100 mln kunnen kosten, maar ook dat konden we opvangen.'
Copyright (c) 2009 Het Financieele Dagblad
verbaend!
0,8 miljoen per personeelslid! is dat normaal in de industrie?
New topic please… I'm bored… trading is dead.
@ sep 27 2008 8:13, If you really believe Tibra did not steal code and now use this in one way or another you should stop reading fairytales before you go to bed. And then trying to scare off somebody by threatening him you will tell his colleagues??? This post is anonymous remember? That is the only reason why you are posting here anyway.
Btw it is quite annoying to only see posts here that all dutch trading firms are nothing but rubish and that the real kings are Mako, Liquid and Tibra. Why don't you english wankers start your own little website like http://www.londonprutsers.co.uk where you can blow each others horn all day?
wow – you must be having a bad year. sorry to hear that. btw i am dutch, and rubbish has 2 b's. in the same way that you are a muppet (with 2 p's).
optiver is at it with Alex today 🙁
optiver is doing what??
@Oct 21, 2009, 8:26pm: You seem pretty convinced that Tibra stole the code. Do you have anything to back it up (apart from the fact that Optiver is trying to sue them)?
Seems pretty obvious to me(not a tibra nor optiver insider) that optiver's legal attack on Tibra is nothing but normal.
They were pretty big guys when they left and so were a big threat to Optiver.
You can also guess that the leaving guys were seeing Optiver as THE ennemy when they set up Tibra(first called FTD trading…fuck the dutch)
And the fact that Tibra is very aggressive in its growth encouraged Optiver to aim for it.
Optiver would make A LOT more without Tibra.
And Tibra is now almost half the size of Optiver(220 vs 550ppl), in three years time!
Anyway, even if they've "stolen" the code, they wouldn't have grown that way without a serious skill set, these codes are always evolving like the markets…
Can anyone provide a rough estimate how much Tibra made in their three years of existence?
According to http://www.smh.com.au/business/the-fastest-guns-in-the-market-20091105-i0au.html
Year 1 = 14m
Year 2 = 57m
Year 3 = 77.5m
I assume these numbers are after tax and bonuses because it says they made 271m in revenue last year. Pretty amazing for such a new company.
wow..really nice that they made 271m in 2008,the year that belogs to MMs..wud be more interesting to see how they performed this year(2009)..
are they still involved in only equity derivatives trading OR they have expanded to FixedIncome,currency,commodities etc..
I think the best trades are the ones by the wives who get married to multi-millionaires in the beginning or middle of their careers when they are still naive not to sign a prenup and have to digest a very significant financial hit when the divorce papers are filed. Just because one has shown impressive money making and loss aversion skills in one area does not prevent one form making significant mistakes in other areas.
awesome !
Go those girls! Damn – I need to make good on my bonus and get me some hot Russian girl!
I thought $271m was a lot of money for a small company? =)
Does anyone know how it compared to Optiver, Liquid, All Options and IMC in 08/09?
"Tibra Capital trades in equity derivatives (stocks and indices), cash equities, FX, fixed income and energy across major financial exchanges."
what dollar is it…$271 – AUD or USD ?
Optiver in 2008 made around 'half a billion' euro(i guess) as written in one of the comments earlier..no idea in 2009..
I think AUD – it's an article from an Australian website, and it's an Australian company.
http://www.telegraaf.nl/dft/nieuws_dft/11931864/__Obama_wil_manipuleren_oliemarkt_aanpakken__.html
Yes US is definitely in the election mode now,