Turbulence without trading

0 comments / February 3, 2009

While the Dutch AEX is holding ground, the rest of the world is sinking again in negative territory. For a trader, falling markets are as good as rising markets. Well, as long as there’s any trading around.

German volumes fall

This is where the trouble starts. The Germans witness a spectacular drop in trading turnover. The German stock exchange trades fell 68 percent in to 105.5 billion euros in January compared with 330.4 billion euros a year earlier. The figure includes 93.1 billion euros in equities, warrants and exchange-traded funds and 12.4 billion euros in fixed-income securities.

70% decline in notional volume

A total of 90 billion euros was traded on Germany’s Xetra electronic-trading system and on the floor of Boerse, a 70 percent decline from last year. German equities accounted for 79.3 billion euros and foreign equities for 7.4 billion euros. Xetra transactions in January fell 42 percent to 14.6 million. To make things worse, the statistics show trading has been even thinner than previous month. This month, December, never counts as a serious month in trading (books closed, Christmas dinner, family matters).

Not all that bad

However, it’s not all that bad. The turnover is the average value of the shares multiplied by the quantity of trades. Except when you’ve been hiding in an Afghan cave for a few years, everyone will know the average value of the shares dropped around 45% over the year. Second, Deutsche Boerse lost it’s monopoly in German stocks. Chi-X is slowly eating away market share. Maybe another percent fell in a dark pool.

Still missing 30% trading volume. After the continuous stream of increasing trading volume in the last years, this news may buck the trend. With investors and banks sitting on their hands, dark clouds loom on the trader’s horizon. Turbulence without trading, sounds like a Jamiroquai track. Thin trading is boring, too.

The vegetarian trader

0 comments / January 31, 2009

According to a very irrelevant (and insignificant) but eye-catching “research“, the level of testosterone has a relationship with the trader’s performance. This outstanding academic study even involved the length of the fingers and the trader’s mother.

Nobody needs university research to prove trading desks consisting of all-male traders in their twenties develop some kind of machismo culture. Again slightly comparable with soccer teams. No vegetarians, gays or non-drinkers around.

Vegetarian sued Calyon

They do exist, though. Mister ~~Serpico~~ Pacifico was a trader at the forex desk of Calyon in New York. Apparently not very successful, as he was fired early 2008 – a couple of months ahead of the outbreak of the current crisis. Pacifico didn’t really fit in the trading environment. The concept of eating animals wasn’t his thing.

“You don’t even eat steak, dude,” Catalanello is accused of saying. “At what point in time did you realize you were gay?”

To cut a long story short ; the vegetarian trader Pacifico sues Calyon. He claims to be fired because he was a vegetarian. Furthermore his lawyer states Pacifico isn’t gay at all. He even married a woman last august. Right. Filing a lawsuit for such silly things makes him definitely a hero.

All Options to acquire Saen Options

26 comments / January 28, 2009

Big news in small Amsterdam. Option market maker All Options buys rival trader Saen Options. I noticed a steep rise in hits on this post thanks to google yesterday.

Yet, a little inside knowledge doesn’t make a difference as none of them are listed. All Options made a killing in 2007. It did their homework better than competitors like Interactive Brokers in trading options Altana.

Ladies and gentlemen, we’ve got him

0 comments / January 27, 2009

Hedge fund manager Paulson did it again. As a present day Gordon Gekko pocketing 270 million pound on short selling Royal Bank of Scotland (RBS). While this is excellent news for mister Paulson and his family – consequences for the hedge fund industry will follow shortly.

“Save our banks”

Politicians will point their fingers at this evil mastermind, the destructing satan of our economy. This policial opportunity is too good to miss. Call for a renewed short-selling ban to “save our banks and the people’s savings“.

Lies, statistics and bubble charts

0 comments / January 22, 2009

“There are three types of lies – lies, damn lies, and statistics”, a famous quote attributed to the British politician Benjamin Disraeli. As of today we can add the bubble charts. Researchers from JP Morgan messed up their data on the capitalization of banking stocks terribly.

The lay offs apparently have reached the researchers in the basement, wife and children have been put to work. Confusing diameter with area leads to chart junk, overstating the impact of the crisis (yes, overstating). Heard they left out Fortis of the research – the remaining market cap couldn’t be visible on pixel level. A decent and less dramatic graph from portfolio.com.

Click for larger image of the bubble chart.

Amsterdamtrader