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Dutch pride: a trading nation weighs its options

Published in Automated Trader Magazine Issue 38 Autumn 2015

It's hardly surprising that technologically advanced trading took off in one of the world's first modern economies. A historic spirit of industrial entrepreneurialism and merchant capitalism, backed by a sophisticated financial sector means that the Netherlands is home to pioneering trading firms that have a long reach into global markets. But it's not all budding tulips. Observers of incoming European legislation warn that smaller players could be left behind as a consequence of regulation.

When the Dutch trading community discusses the exceptionality of its markets, terms that consistently come up are: history, diversity and transparency.

For history, the country's capital, Amsterdam can boast a few important firsts. In the 17 th century, merchant capital gave rise to the need to manage risk, which led to the first organised stock exchange. Ultimately, this paved the way for the first market makers, and, more recently, the first European options exchange in the late 1970s.

"A lot of trading firms that have blossomed in the Netherlands come from a presence on the European Options Exchange in the 70s," said Johannah Ladd, secretary general at FIA European Principal Traders Association (EPTA). "It's reflected in the larger option houses we have here."

Three of the largest firms headquartered in Amsterdam - IMC, Optiver and Flow Traders - are founding members of EPTA. But it's not just those largest firms the Association is concerned about, as anticipated European regulations roll out.

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