Flow Traders
 | |
| Euronext: FLOW | |
| Headquarters | , Netherlands  |
| Website | [1] |
Flow Traders is an Amsterdam market maker. It provides liquidity in the securities market by providing bid and offer prices. The company was founded in 2004 and has been listed on Euronext Amsterdam from 10 July 2015.
Activities
The company was founded in 2004 by Jan van Kuijk and Roger Hodenius. It is a market maker. It provides bid and offer prices for Exchange Traded Products (ETPs), a collective term for index products such as Exchange-traded funds on securities and commodities. The difference between the bid and ask prices is the profit for the company.
The traders of Flow Traders collect the spread and the development of the market, up or down, is irrelevant. When buying or selling ETPs, the company immediately takes an opposite position so that it does not run any price risk. Flow Traders can grow as a result of the growth in ETPs and by gaining market share from competitors.
Results
The net trading result is the gross trading result minus the commission it paid and after deducting the financing costs. However, this directly effects the compensation given to their traders who naturally receive a lower fixed salary and then are supplemented with a bonus if the results are good. For comparison, in 2018, the fixed employee remuneration pool was €36 million and the variable compensation was €96 million, whereas, in 2017 these figures were €32 million and €25 million, respectively.
| Year | Net Trading Income | Operating Income | Net Income |
|---|---|---|---|
| 2012 | € 91.2 | € 32.1 | € 27.7 |
| 2013 | € 143.3 | € 61.2 | € 53.6 |
| 2014 | € 172.7 | € 78.5 | € 67.9 |
| 2015 | € 304.7 | € 114.4 | € 97.3 |
| 2016 | € 250.0 | € 109.6 | € 91.9 |
| 2017 | € 166.0 | € 48.3 | € 39.6 |
| 2018 | € 383.4 | € 193.9 | € 160.9 |
| 2019 | € 216.4 | € 65.3 | € 53.1 |
For the first quarter of 2020, Flow Traders reported a 684% increase in net trading income to € 495 million, more than any full fiscal year in the company's entire history. As a result of the COVID-19 pandemic, stock market volatility was very high. Due to the great pressure, personnel costs, including variable remuneration, rose sharply. The net profit for the quarter was a record €262 million, in the first quarter of 2019 the profit was € 19.2 million.
IPO
The company was listed on Euronext Amsterdam on 10 July 2015 . The shares were placed at a price of €32 each, or approximately €1.5 billion in total. Flow Traders floated up to 40% of the company. The two founders both sold an interest of about 6%. Flow Traders did not place any new shares, so none of the proceeds went to the company.