All Options in 2010 : Losing 300k, daily

104 comments / February 13, 2012

Heralding trumpets. Pat myself on the back. Told you so. Twice.

As everyone in de business knows, All Options lost their shirt in 2010. Majority of staff axed, and the firm retreated to their small office on the Herengracht. Full scale cost cutting. The numbers are in for the personal holdings of the man who flew to close to the sun. Allard Jakobs lost EUR 67,8 million in 2010.

300k per day

His other investments fared better, so All Options lost even more. Say 70 million. That’s a very impressive EUR 300.000 per day (and the weekends are for free). The company was loaded with overhead. Too many oversized offices and too many cash burning folks occupying the desks. But you don’t lose 70 million on overhead. Derivative positions must have been a costly affair.

Tax claim

But there’s more. A provision has been taken for a tax claim worth € 38,5 million. And this may not be enough. Details are unknown, but the firm has an office in Curaçao. You don’t start a trading desk in the Caribbean for the weather, the proximity hosting or the well educated locals. A less exotic possibility is a messing around with dividends and short stocks in Germany.

The underdog again

I always fancy the underdog. And hey, All Option is one of the underdogs again. The only way is up. While the tagline “a leading European derivatives trading house” is misleading, Allard Jakobs remains the comeback kid of the market. So don’t be surprised if he hits the jackpot again sooner or later.

source : Quote (Dutch)

IMC lost play offs. All of them.

11 comments / February 9, 2012

Last round of play offs for the primary market maker licenses ended last week. In nearly a dozen option classes the traders have been trying to quote as tight as possible for two months. The best liquidity provider wins. It wasn’t IMC so send the tightest quotes. IMC lost play offs. All of ‘m.

The battlefield. The winning team in bold.

Option Class	Market Makers competing
Aegon (AGN)	IMC, Tibra, Nino
DSM	IMC, Scrocca
ING	IMC, Nino
KPN	Caerus, IMC
Mittal (MT)	Caerus, IMC
Philips (PHI)	Caerus, IMC, 323
Post NL (PNL)	All Options, IMC
Royal Dutch (RD)	Caerus, Tibra
Randstad (RND)	IMC, Scrocca
TNT Express (TNE)	All Options, IMC
Tom Tom (TTM)	All Options, 323
Unilever (UN)	Caerus, IMC

Caerus takes over three licenses from IMC. Six other licenses flow from IMC to 323, Nino and Scrocca (two licenses each). Not sure yet who has won the minor roles in TNT and Post NL.

Not a photo finish

IMC lost all play offs. That’s not the end of the world. Trading the options on Euronext can still be done without too much loss of quoting power with the Competitive Market Maker role. In addition, trading options on rival exchange TOM could be much more interesting than old and expensive Euronext.

There is something strange about IMC. Obviously the traders from Defares and Pot didn’t take the play off seriously. The other market makers have beaten IMC by wide margin. IMC didn’t even try to win.

This puzzles me. Perhaps IMC doesn’t believe in the added value of PMM licenses. Possible. But in this case, they shouldn’t have signed for the licences. Besides, they are still primary market maker in stocks options such as Ahold, Royal Dutch and ASML. They lost at least nine roles this time, and they will never get them back.

French tax plan : Au revoir, CAC40

20 comments / February 6, 2012

The financial transaction tax is a fine way to hurt the economy as a whole and eliminate trading. Volumes will be erased. Never thought it to be likely to come into effect in reality, but I underestimated French stupidity.

Here‘s the official plan. Four pages in French about taxes, not my cup of tea. In short, there’s good news and bad news. The bad news is the trading in large cap French stocks will be hurt severely and the derivative market will cease to exist.

The good news is the measures won’t work. Practical issues are deeply rooted in the plan and hard to overcome. In the extent the plans will work (partly), France will show the rest of the world how to shoot in your own foot. Even socialists in the rest of Europe will be scared enough to get second thoughts.

The masterplan

Only French stocks with a market cap in excess of 1 billion euro will be affected.
Any buyer of these French stocks will have to pay 0,1 % tax. This also counts for derivatives such as options (notional), hence the option market will be gone.
Credit Default Swaps will be taxed 0,01%.
High frequency trades will be taxed 0,01%

It doesn’t matter where the trade is done. A Russian buyer of shares Total or Sanofi on Wall Street will be taxed. Vladimir has to pay money to Sarkozy. The administration will be done by keeping track of the Central Securities Depository (CSD). This CSD receives the nett change from other central clearing parties, so buying and selling shares on the same day wouldn’t be taxed with the current proposition.

Suppose, for sake of the argument, the French fix all practical problems and their markets will be gone. Very well possible one of the biggest option classes in Amsterdam would be hit as well. After all, Mittal is part of the CAC40. Maybe a suggestion to liquidate your positions while you still can. To be continued.

Euronext to open “Café 5”

5 comments / February 1, 2012

NYSE Euronext can’t marry Deutsche Börse. That’s good news for anyone interested in competition. And good news for the staff at both companies, which would have been axed by numbers.

As brought the news here in december 2011, Euronext will start a cafe on Beursplein 5. It has now been confirmed the bar will be run by Brasserie Harkema. However, there’s no permit yet to open doors to the public to sell the beers. Without it the bar would only be open for Euronext staff and traders and brokers working in the building.

You don’t need Harkema for that. Guess the permit won’t be such a big deal then. Anyway, I like the idea of having your beers with a stock ticker above the bar. Good for the oldskool atmosphere. This stock ticker is confirmed, as well as the name of the bar : Café 5. Too bad the website is already taken by another Cafe 5.

Opening per March 1st.

KBC Clearing throws in the towel

60 comments / January 27, 2012

Short post on something very relevant. KBC Clearing will be shutting down operations. It didn’t come as a big surprise. They lost critical mass. Their major market maker clients went bankrupt (Van der Moolen), vanished (All Options) or left (Scrocca).

The Belgian mother KBC Bank decided to call it quits after 16 years. A sad thing for the staff at KBC and for the market as a whole.

Used to be two clearing banks for market makers in Amsterdam. Alas, no more. ABN AMRO (Fortis) is the only remaining clearing bank in town.

Amsterdamtrader