Amsterdam-based options market making enterprise, Optiver, has a superfast oil trading software, called Hammer (reported by the NY Times). The CFTC believes Optiver has been manipulating the price of oil. Transcripts and taped conversations reportedly described traders talking about their activities as "whacking" and "bullying up" the price of oil. Commodities is 10% of Optiver's business, 65% is derivatives, 25% equities.
Regulators are wondering how prop trading and market making can coexist. Are the two inseparable? Tanno Massar, PR exec for Optiver, explained that there was no inherent conflict between making markets and pursuing profits, indeed, why would markets be made if profits could not be sought? Who would make the market then, the government? Supranationals?
The Chief Regulator of NYMEX, Thomas LaSala, reprimanded Optiver: "the market seems to move in reaction to your orders". The US has led Europe in high-frequency trading, but Getco and Madison Tyler have worked to fill that gap.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment