One of the oldest Dutch fintechs on the market, leading global trader Optiver is under the spotlight this week, presenting its challenges and success, entrepreneurial culture and vision.
Over thirty years ago, Optiver started its business with a single trader on the floor of Amsterdam’s European Options Exchange. Today, Optiver is a leading global electronic market maker, focused on pricing, execution and risk management. Optiver provides liquidity to financial markets using their own capital, trading at their own risk for a wide range of products: listed derivatives, equities, ETFs, bonds and foreign currencies. Optiver is genuinely one of the first real fintech companies out there, revolutionizing trading from a paper-based business to electronic trading way ahead of local competition. Since this move has been made, Optiver has always strived to remain at the forefront of technological modernisation and innovation. Today it is one of the largest electronic market makers in the world.
During the twentieth century, the majority of trading floors operated as so-called open outcry systems with traders in colourful jackets shouting orders to each other. In the late 90’s, Optiver was one of the first in the Netherlands to change their approach, first using computers to calculate option prices and later trading through electronic computer programs, making the trading process cheaper, more efficient and also more accurate. But the core business has never changed and that is market making, i.e. providing liquidity to the market by posting buy and sell orders in the market at prices for which Optiver is willing to trade, putting their own capital at stake.
The business of market making has underwent a rapid transition over the years with the adoption of electronic trading, for which Optiver was a strong local driving force. The result of all this innovation is that financial markets have become much more efficient and cheaper to trade for investors. Further innovation is now allowing computers to take the trading activities to a next level, with trades being executed by software programmes run on algorithms, which are devised in-house by Optivers traders and programmers.
One of the differences between Optiver and other financial firms is the entrepreneurial culture, based on the ownership profile of the company and the philosophy which is engrained in its employees. Kris Manios, Technology Lead at Optiver, acknowledges that this culture allows for a high level of personal development, having spent the last ten years circulating between different departments, strengthening the IT capabilities of Optiver and developing new solutions to drive its business. One of the biggest perks according to Kris is nature of its work:
“Being a developer in Optiver allows you to see the results of your labour directly put to use, as end-to-end development cycles are standard within the company.”
Because people within Optiver see themselves as working for a technology company, developers are thoroughly involved in the business, allowing them to head off the many challenges a company like Optiver faces. Markets change every day, competitors improve their models and Optiver is also continuously looking to expand into new markets and asset classes, providing fresh challenges. Competition between market makers is global and it is therefore important for firms like Optiver to hire the best, and continuously stay on their feet.
As maybe one of the oldest “fintech” firms in the Netherlands, Optiver is embracing the culture shift which is currently engulfing finance. One of the benefits for Kris is that people are starting to view them as tech companies, aided by their membership of Holland FinTech and the interaction with the network.
While Optiver is focused on improving the markets worldwide, it is keen on keeping the culture of doing so and adding liquidity to the markets in the safe and right manner.]]>