Optiver financial and legal reports
During rainy weekends my favorite pastime is reading financial statements. Especially those from market makers such as Optiver. Firm has released their key figures to the press earlier, but here are the core financial statements (pdf). No surprises in terms of profitability, but it’s worth a closer look at employee compensation.
Modest compensation for employees
Headcount is down with 10% to 584 employees. The average compensation for them was 157.000, including an average bonus of 63.000. While that’s enough to make a living, compared with the annual profit it’s pretty disappointing. Traders are subtantially better rewarded elsewhere. Compare the figures with IMC – which is earning less than Optiver in trading revenues except for 2009.
Hammer case and Tibra trouble
There is finally some more color on the legal cases running. In two weeks the mediation talks will be held with CFTC on August 5th, and the everlasting problems with Tibra will continue in june 2012. Court will be hosting this event for eight long weeks. Provisions for the infamous Hammer incident remain the same at a level of 13 million. As I understood the CFTC agreement will be followed by a mirrored class action and finally there is a criminal investigation going on by the Department of Justice.
Another small note on something completely different. Comments below can be rated with a fast and easy thumbs up or down system. A major technical breakthrough.
The traders are probably being awarded at similar levels but with more IT staff, the average is probably getting pulled down for optiver .. also probably the partners are getting dividend, so this compensation doesnt fully reflect the senior trader’s compensation ..
5:54 pm: nonsense. Other firms (such as IMC) have similar sized IT departments. As for dividends and the company’s earnings after bonuses, one mustn’t forget that the majority of Optiver shares are held by partners who have been on board for close to 20 years now. In other words, most traders have only a fraction of a percent of ownership (which is to be given resold upon leaving the company) if anything at all.
I don’t get it. Why does Optiver have to report anything while the Federal Reserve does not have to disclose who they gave bailout money to unless they are forced to?
A big chunk of the profit is indeed going to the shareholders by paying Dividends. But it isn’t correct that virtually all shares are held by partners who have been there for over 20 years, there’s a whole bunch of senior guys who started less than 5 years ago who have a nice pack of shares. Distributing these shares is just a way to create long term commitment for talented and skillful guys.
1. The time for the respondents to file and serve their lay evidence on liability be extended to Friday, 15 July 2011.
2. The time for the respondents to file and serve their expert evidence on liability be extended to Friday, 16 September 2011.
3. By Monday, 29 July 2011, each party serve on the other party their proposed categories of documents for discovery.
4. The parties produce copies of documents in any agreed categories by 28 October 2011.
5. The matter be listed for argument in respect of any discovery categories that are not agreed before a Judge of the Court on a date to be fixed following consultation with the Associate to Emmett J.
6. Professor Zobel and Dr Harris have access to all “Tibra Confidential Documents” and “Tibra Source Code” on the terms of their previously executed confidentiality undertakings until 24 February 2012.
7. The applicants file and serve any lay and expert evidence in reply by Friday, 24 February 2012.
8. The trial be set down for a period of 8 weeks, commencing on 4 June 2012.
9. The matter be listed for directions at 9.30am on 2 March 2012.
10. Costs in relation to the proceeding generally be reserved.
2:17 am
Please define “nice pack of shares”. 1 basis point? 2 basis points? It is simple maths really. If you have 250 traders scrambling over less than 20% of the shares to be divided among themselves, how many do you think can own 1% or more? 100? All 250?
whahaha, hulde Jack!
voor moving MC ‘to tha’ Hammer
What’s the reason for the difference between net profits and net profits attributable to shareholders?
Correction for minority stakes that are treated as full subsidiaries in the report probably.
It doesn’t look like a correction when it’s there for four years running. I’d guess it’s some other form of bonus or profit sharing.
Do you understand the concept of consolidation in accounting?
there can be fair bit of accounting gimmickry, so sometime if the footnote doesn’t give the explanation, it’s not possible to know what the actual deduction and add-backs were ..
‘Other firms (such as IMC) have similar sized IT departments.’
So you are 100% sure the compensation for IT department is same across Optiver and IMC ?!
‘one mustn’t forget that the majority of Optiver shares are held by partners who have been on board for close to 20 years now. In other words, most traders have only a fraction of a percent of ownership’
Well if the traders are getting screwed, so what, it’s not a free economy over there, you can’t really switch companies, Tibra as an alternative is increasingly fading, there aren’t many out there who can quit Amsterdam and slug it out in London,
‘I don’t get it. Why does Optiver have to report anything while the Federal Reserve does not have to disclose who they gave bailout money to unless they are forced to?’
Watch Zeitgeist, the world will be much clearer place, though don’t believe everything it says, use your head too,
‘If you have 250 traders scrambling over less than 20% of the shares to be divided among themselves’
I would guess only 30-40 senior traders companywide are partners at optiver
“So you are 100% sure the compensation for IT department is same across Optiver and IMC ?!”
The alternative would be that most bonuses at Optiver are paid to IT staff. And that an IT at Optiver generally has a base salary of 1 million, whereas an IT at IMC only gets 50k.
Of course the compensation for an IT person at Optiver and IMC are comparable you dumb f*ck.
“Watch Zeitgeist, the world will be much clearer place, though don’t believe everything it says, use your head too”
If only I could use your superior brain to guide me through life and the Zeitgeist documentary in particular. I try to use my head as little as possible (and do most of the thinking with my little head).
‘Of course the compensation for an IT person at Optiver and IMC are comparable’
stop jacking off your small dick .. once stopped, go back and read my post carefully .. i was comparing compensation for IT department .. maybe that is different from comparing compensation for IT person ?
‘I try to use my head as little as possible (and do most of the thinking with my little head).’
wait its better you go back to wanking your head, a classic jerk-off .. reminds me of little Ben ..
The original poster wrote:
“Other firms (such as IMC) have similar sized IT departments.”
Well if we agree that the average IT person is paid more or less the same at Optiver and IMC, and the number of IT people of more or less the same (a fact that is easily verified), then I think total IT compensation is more or less the same.
But I can’t be sure. Busy wanking little head you know.
‘the number of IT people of more or less the same (a fact that is easily verified)’
is that verified through annual report ?
a) common knowledge … unless you buy IMC’s rebranding of IT staff as traders … talk to some traders from either company
b) both are at roughly 50/50 in terms of traders / rest (mostly in IT), see for example Optiver’s annual report for the previous year (at least for their headcount)
seriously, did you think that one has 5% IT staff, the other 95% ??
Optiver versus IMC remains a fair comparison.
Het nodige knip en plakwerk zij het met bronvermelding.
http://www.quotenet.nl/quote-500/werknemers-optiver-delen-niet-in-megawinst.php
‘a) common knowledge … unless you buy IMC’s rebranding of IT staff as traders … talk to some traders from either company’
sounds bit of bs, so stop selling it ..
‘seriously, did you think that one has 5% IT staff, the other 95% ??
Optiver versus IMC remains a fair comparison.’
stop being a wanker and try to rationalize the point. i dont have exact numbers, but say optiver is 300 IT and 200 traders; for IMC say its 200 IT and 200 traders .. IMC is US centric and Optiver is dutch centric .. IMC is more centralized at top with few holders and teams below less integrated .. optiver is decentralized at top with lot of partners and quite integrated at lower levels .. most importantly there is no cross movement in the companies so the discepancy can easily exist in terms of compensation at medium and senior levels .. looking at bare averages company wide is stupid .. you have the right to be stupid ..
Jack does lot of good things .. but generalizing and looking at company wide averages is just being ignorant of what really is going on ..
Ummm … headcount at IMC is presently over 600 (200+200 = 400) … please visit the previous thread, there’s a diagram. Guess you missed that as well, you’re a couple of years behind.
As for claiming IMC is US centric … what are you smoking? Your ignorance tells me you must be American. Optiver’s profits were in recent years split more or less evenly between Europe and rest of the world (Asia/Australia doing better than US), so to say that Optiver is Dutch centric is plain stupid. You are feeding us bullshit about the company’s structure yet you have no clue about how many people work there, the division between traders and staff, P&L split by regions, etc.
Looking at averages is all one can do unless you have more detailed information that you would share with us commons. And with that I mean facts, not your manager-wanne-be lingo about decentralized cross movement integration. WTF?!
As for the number of partners / shareholders, it is not relevant for the discussion. Jack’s comparison wasn’t about how many partners have to split the IMC / Optiver dough, it was about which company pays its traders better – on average – all other things being indeed more or less equal.
“generalizing and looking at company wide averages is just being ignorant of what really is going on”
So now I have watched Zeitgeist two times in a row … but I’m still clueless. Please tell me, what is really going on??
Re shares – if you put up all you owned into a start-up 10,15,20 years ago with no guarantee of success then years later if you left that same company, I think you would believe you had the right to keep those shares and not have to sell them at book-value to some kid who joined the trader a few years back, when it was a known success, and had everything perfectly in place.
That is the line I was told when I started in this business, and it took me a while, but I agree with it now 100%.
http://www.quotenet.nl/quote-500/all-over-voor-all-options.php
has anyone heard anything about this new market maker in Europe called ‘Principle Trading’?
‘headcount at IMC is presently over 600 (200+200 = 400).. please visit the previous thread, there’s a diagram. Guess you missed that as well,’
What a huge change its going to make for comparing Optiver and IMC .. even Optiver might be 600 rather than 500 .. does that change the comparison too ? In grand scheme of things, they are both few hundred employees, I’ll leave the equity research on them to you ..
‘As for claiming IMC is US centric’
Yes, that is anecdotal, but I haven’t heard anything otherwise .. pardon to have got it wrong if it was the case
‘Optiver’s profits were in recent years split more or less evenly between Europe and rest of the world’
That’s missing the point, of how heavily the firm is dependent on Europe vs US when it comes to Optiver vs IMC, if you don’t understand why, that’s okay,
‘Looking at averages is all one can do unless you have more detailed information’
If you have just bare averages, another option for you is to do ‘nothing’, rather than talking bs based on misleading averages ..
‘decentralized cross movement integration’
Don’t attribute random stuff to me ..I never said those bs jargon..
‘As for the number of partners / shareholders, it is not relevant for the discussion.’
Senior traders, around 20%, at Optiver are Partners and how they are compensated is not relevant to discussion for trader’s compensation ?!
‘Please tell me, what is really going on??’
Nothing in particular, go back to wanking ..
http://www.rtl.nl/components/financien/rtlz/nieuws/2011/30/Quote-All-Options-ontslaat-80-procent-van-het-personeel.xml
eclipse sucks more than all options …
okay, why dont you leave eclipse and find job in better firm ?
is that guy still there, the dutch trader at all options who was showing off his rolex and was up 10,000 swiss frank at the opening or the spanish guy who loved teaching trainee traders and became all friends with the brokers at end ..
anyone who can comment on what the hell happened at all options?
classic hacking .. he’s ex-optiver mother fucker, knows when to hack .. solid move .. got to admire these optiver people in cutting loses ..
Dude for you to even suggest that Allard is good at cutting his losses … that’s a low even by your standards. Don’t you know Allard bankrupted one of his previous companies due to a spread position that went against him badly (yet he kept piling up bigger positions until the clearer pulled the plug on him). The magazine article speaks of rumors that Allard has put private money of his back into All Options to keep the operation afloat (we’ll know more when he gets round to publishing his annual report). How’s that for “hacking”?!? BTW, his reckless punting was the reason he didn’t fit in with the Optiver crowd almost 20 years ago.
You really have no f-ing clue. Can’t you do us all a favor and find another corner of the internet to troll or simply ask your parents to take away your internet access in the basement?
“Senior traders, around 20%, at Optiver are Partners and how they are compensated is not relevant to discussion for trader’s compensation ?!”
Exactly. Their equity stake is a different discussion, for the simple reason that such compensation is not available to the vast majority (80% by your own admission) of traders at Optiver. And again you are overstating the size of their stakes.
Let’s draw a parallel with your buddy Allard. Bonuses at All Options were pitiful (even in the year they made so much with Altana). Throughout its 10 year existence around 4% of the combined profits (not counting losses) were put into the bonus pool. That’s an industry low I think. The fact that some of the traders / managers had a rather small stake in the company did not materially change the statement that compensation was poor (only Allard won – big time).
Back to wanking now.
The Optiver haters should recognize that few MM have produced as many Billionaires as Optiver (i.e. at least two). They must be doing something right.
Timberhill? Petterfy must be well into that league
Citadel? the company is owned mostly by one guy
Jane/Getco? Owned by only a few each
Susq? The vast majority split between about 5 guys?
Hull?
the list goes on….
‘Allard bankrupted one of his previous companies due to a spread position that went against him badly’
yes he takes big positions, yes he bets the house, but things/people can change .. AO cuts are good hack .. period ..
‘his reckless punting was the reason he didn’t fit in with the Optiver crowd almost 20 years ago. ‘
If the opportunity is big, the punt has to be lot bigger .. Soros/Paulson/Tepper are prime egs .. there hasn’t been any reckless punts since Allard’s bankruptcy 10 years ago, mistakes in form of Sean, yes, but none reckless ..
‘such compensation is not available to the vast majority (80% by your own admission) of traders at Optiver.’
Those traders are morons waiting to be replaced by robots, they don’t deserve any compensation, if they are good, they’ll be made partners otherwise they can fuck off ..
‘Bonuses at All Options were pitiful’
Like I said, either you get paid or your welcome to fuck off .. its free economy but no free lunch ..
‘the list goes on….’
thats the case with entrepreneurs .. keep in control of equity .. intial success is the hardest .. first million/billion toughest ..
as for this claim of the “at least two” billionaires, call me sceptical, but i just don’t believe it. Not even the dutchy who started the company. Other than relying on the gibberish that graces this website, does anyone have any real proof of the claim? I am $500m offered (well offered). Yes the company is a big success, and well done to those involved, but claims of multiple billionaires is taking a bit too much liberty…..
I’ll second that. Would be very suprised if we’ve produced multiple billionaires
If we ever went public then some of the early guys might make it, but now, “at least 2”, sold
Agreed. Johan might be worth $300mill perhaps (he was in the Dutch rich list a few years back and they valued him between $200 and $300m from memory). So talking about billionaires is ridiculous.
MM could never produce bn, you need to punt to get there,
This guy is actually a real billionaire in USD and so ARE THE OTHER 4 CO-FOUNDERS.
The real ritch guys are not in Amsterdam dudes, Jeff creams Johan, Jelle, Randall, Rob (both of them) Wiet and everyone else put together.
No contest.
Oh yeah guess who is one of the biggest PE players in China>
http://www.sig-china.com/AboutUs.asp?Lang=en&id=1
erm…. whoops??
Former IWB broker is getting a baby. And it is in the news:
http://www.telegraaf.nl/prive/10277477/__Nicolette__beledigt__Frans_Bauer__.html?p=39,2
she seems to be mini-celebrity in dutchland, nice,
I hope he does math better than she does.
“Nicolette en haar Bas verwachten in februari hun eerste kindje: “Het was in juni raak”
Last time I checked june till feb is 8 months and the normal carrytime is 9 months…
that’s the guy who was shoplifting sandwiches in the exchange cafeteria!
he was not allowed to come there for more then a year.
if conception happens on June 1, expectant date of Feb 28 is perfectly normal, mr math genius,
http://www.youtube.com/watch?v=OPruKs1uld4
http://www.ft.com/intl/cms/s/0/f2214c70-ce60-11e0-99ec-00144feabdc0.html#axzz1VyeR5YLW
“The Commodity Futures Trading Commission has sought at least $10m in penalties against the Netherlands-based trader, a person familiar with the discussions said.”
$10m is a waste of time for all parties involved. Optiver should take it.
yah you can’t get away with lower than that, good news for optiver !
Whoever thinks traders at Optiver for less than 5 years and have a nice pack of shares is delusional. Whatever they have would have been bought at an astronomical price, and one that the bonuses would not have supported. There are no concessional distributions.
‘Whoever thinks traders at Optiver for less than 5 years and have a nice pack of shares is delusional.’
That was indeed the case 10 years ago, just few dozen people in the firm .. but with 500+ now, its much too big for anyone new to get paid that much …
$14 mln in the end. It’s good to get the case over with I guess.
http://www.reuters.com/article/2012/04/20/optiver-settlement-idUSL2E8FJIP820120420
Pissweak.
Optiver can easily take the hit. And Hilgers remains a billionaire. Life is sweet.