Optiver Amsterdam

WHAT WE DO

Optiver is a global market maker, trading on all major financial markets around the world, using its own capital at its own risk. From our offices in Amsterdam, Chicago and Sydney we add liquidity to exchanges and focus on relative pricing differences between related securities. By offering liquidity, volume and pricing on several exchanges and trading platforms around the world, Optiver contributes to the stability and functioning of global financial markets and economies at large. Through our offices worldwide we trade in a wide range of products, covering listed derivatives, futures contracts, equities, ETF’s, bonds and foreign currencies, both on-exchange and OTC. But despite the large scale on which we do business, we take on comparatively limited risks. We close out most of our positions at the end of the day.

With 25 years of experience in the financial markets and employing the best traders from all over the world we have gained a superior understanding of all the factors influencing the prices of securities, derivatives and other instruments. And our state-of-the-art trading systems enable us to respond swiftly to every change in the markets.

Since we started in 1986 the way financial markets operate has changed significantly and so has our company. In these competitive times it’s more than ever important to improve trading strategies and IT technologies. Our IT department activities are as vital to our success as the skills of our Traders. We currently employ one IT professional for every trader.

Making a market

Have you ever wondered how it’s possible, always able to trade a share? You can place an order, and within some seconds it’s executed. Whenever a transaction is bought or sold, there must be someone on the other end of the transaction. This is where a market maker comes in.

Say, you as a retail investor want to buy a certain share on the exchange. But there may not always be someone willing to sell that same share at the exact moment you want to buy. That is when a market maker steps in, as counterparty to your trade. The appreciation of exchanges of the liquidity market makers thus add to the markets have led most exchanges to have multiple market makers present, creating liquidity and providing investors continuously with both bid and ask prices.

HOW DO MARKET MAKERS MAKE MONEY?
Market makers are most prominently active in derivatives. For each derivative a market maker calculates the theoretical value. A call option may, according to the market maker, have a theoretical value of 10 euro. In that case he can quote a bid price of 9.98 and an offer price of 10.02. This means that he will (theoretically) pocket a small profit of 2 cents on each option he buys or sells. Thus market making is a low margin/high volume business, meaning we have to do a very large amount of transaction to make a decent profit.

A market maker usually takes no directional positions (it does not matter if the price of a financial instrument goes up or down) and is very risk averse. To prevent the risk of the market moving against his position he will either try to do an opposite transaction (immediately sell what he has just bought, or buy back what he has just sold) or hedge the transaction by buying or selling another instrument (e.g. the underlying share of an option contract).