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Euronext to invade Germany

14 comments / November 5, 2015

BeginernietoverDon’t mention the war. Euronext created country indices for Germany, Spain and Italy. Stock indices consisting of 30 stocks each. Developed these indices somewhere in the summer, but now the plan is to introduce derivatives on these indices. Futures and options on a competitor for the DAX.

I don’t make this up. Plans will probably be postponed forever, because this is not going to work. It will fail. No real flow, no market maker support and no liquid futures market. Empty screens are a common issue for Euronext, but this would be embarrassing.

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How DeGiro screws clients

111 comments / October 20, 2015

There is a difference between smelling a rat, and catching one. A few weeks ago I noticed the hedgefund HiQ was in the kitchen of online broker DeGiro. Terrible situation, don’t set the fox to watch the geese.

Worried about extra risks, in case of a collapse of HiQ. Everything at an abstract level. Today I discovered some more urgent issues at DeGiro.

Clients can’t trade with clients

It turns out clients of DeGiro can’t trade against other DeGiro clients. When clients want to cross the spread, the other side is always taken by the “join orders” of hedgefund HiQ. Clients with a passive sitting order in the market will never get executions from other DeGiro clients.

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Hilarious stock trading tax in Belgium

11 comments / October 13, 2015

Belgium isn’t the heart of Europe’s trading battleground. Even while it’s home to one of the biggest companies in the world (AB Inbev). The exchange in Brussels is part of Euronext.

The Dutch see the country as a little nephew. Next year, when European Championship kick off – everybody will support the Belgium team. Holland won’t qualify.

There’s one little thing wrong with Belgium. The current government. This weekend a new financial tax has been created, which is nothing short of amazing. It has got three problems. It makes no sense, it is not fair and it won’t work.

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Finally, a Dutch rogue trader

4 comments / October 7, 2015

Tim RemieA Dutch rogue trader has been busted. With many trading firms in the country, it was about time. France has Jérôme Kerviel, US has John Rusnak, Japan “Mr. 5%” Hamanaka and the UK has even two winners with Nick Leeson and Kweku Adoboli.

Thanks to Tim Remie, Holland is on the map again. He lost at least $200 million for his employer Nidera. His massive (unauthorized) trading bets turned painful when commodity prices sank. Management finally discovered the losses. The Rotterdam based grain trading company lost it on mr Remie’s biofuel positions.

WSJ reported mr Remie had “another side of the story”. Nobody has yet discovered what his story is. There have been some rumors of a more complicated story than plain simple rogue trading. After all, losing $200 million on rogue trading in the Nederlands can’t be true, can it?

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How the NSA financed Atlantic cable for HFT

8 comments / October 6, 2015

Kabeltje leggenThere’s a new episode in the speed race among the top HFT shops. The Express cable under the Atlantic ocean by Hibernia Networks is finally finished. It has taken years longer than expected, but now it’s pretty fast. It takes 59.5 58,95 milliseconds for a round trip across the Atlantic ocean. That’s six milliseconds faster than the former speed king, the Atlantic Crossing 1 line of Level 3 Communications.

As usual, time is money. The high speed cable rent will set you back for $20 million for five years. That’s $333k per month. A slower version (62,5 ms) is only $35k a month. The 59.5 line (which is in reality 58.95) is guaranteed by Hibernia. If they fail to deliver, you’ll get your money back.

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