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Why I won’t invest in Flow Traders

27 comments / July 7, 2015

FlowTraders-nFlow Traders is aiming for a valuation between €1.35 and €1.7 billion. That’s a lot, more than three times the market cap of a stock like Binck. It seems excessive for an IPO. After all the company made only 68m profit last year. That’s a multiple of more than 21. Not cheap.

2015 will be a great year

However, it’s safe to say the current year will be much better than the last. We’ve seen some rocky days. In the first 6 months Flow made a profit of around 55m. Predicting the yearly result is tricky, but 100m doesn’t look unrealistic. That would indicate a forward PE ratio of 15. More or less the same as rival trader Virtu. See the growth in their yearly profit.

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Optiver killed it in 2014

25 comments / June 26, 2015

Bad year for OptiverOptiver reported a record profit of € 246.9 million over 2014. This is better than the previous record from 2008 (€228 million) and once again they are the smartest kids in the room. They’ve beaten rival trading firms. Didn’t really come as a big surprise. Apart from an informed comment on this website, even traders from IMC Financial Markets realized their record year would be improved by Optiver.

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Optiver settles (again) in Hammergate

4 comments / June 25, 2015

Stop, Hamertijd!Optiver bullied the oil markets in the course of 24 days back in 2007. They used their software program named “The Hammer” to manipulate the close of oil futures. By doing so it made a sure profit, because it had build up big positions in TAS contracts (Trade At Settlement). See this four page pdf from the CFTC. A nice read, the watchdog even taped their the “cover up fairy tale”. And of course this perfect quote:

You should milk it for right now because you never know how long it’s going to last.

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Equity option competition in Europe

19 comments / June 18, 2015

This is a guest post by Cornelius Müller, who works for Eurex / Deutsche Börse. It appeared first on brokerdealer.nl. This isn’t an academic paper, as you may expect the author is a supporter of a certain derivatives exchange. Still, he has valid points, nice charts and a great overview of the European option competition between exchanges. A good read.

“Liquidity is sticky” is an often heard quote when competition between exchanges is discussed. So when TOM announced that they were taking on Euronext back in 2009 it was met with skepticism. Now in 2015 we see TOM at approximatively 30%. However, in his own column Willem Meijer, the CEO, claimed a 45% market share noting also that once Eurex reached a 50% market share competing for the Bund future, all remaining volume quickly followed. It looks like TOM is aiming for that magical 50%, hoping that history repeats. It’s perhaps also an explanation why they make a huge effort to polish the numbers, pushing the percentage as high as possible. The truth is however that TOM never reached a 45% market share and that the market share has been stagnant for the last couple of months.

TOM’s quick rise

Dutch options market share

MARKET SHARE IN DUTCH EQUITY OPTIONS

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Traders trolling with cars

13 comments / June 12, 2015

pajpuuh

Some people never grow up. This 46 year old Dutch ex-IMC trader had his own little blast. Somewhere in Western Australia (according to the picture) he bought a Lexus car and got himself a license plate describing the activity of, well, let’s say, the best five minutes of silence a married man can ask for – and an illegal act in Malaysia.

Ask a Dutch person to read it out loud for you. Just reading it may not immediately ring a bell. Perfectly undercover. Tibor is driving his car in Perth with this license plate every day. Tibor Bejczy sounds a little Hungarian, but the guy is Dutch and was one of the very first guys hired at IMC Financial Markets – started somewhere in the early 90s together with Adrie de Beste. He used to do very well, bringing home a fine bonus every year. Good pals with Rene Schelvis.

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