Campout For Profits: Why Tents In The Office Earned Flow Traders Massive Pandemic Returns

Sleepovers don't often turn into multimillion-dollar trading operations, but not everyone was trading during the COVID-19 pandemic. 

But when the world ground to a halt in March 2020, businesses had to alter their strategies, and nowhere was that more evident than Flow Traders, an international proprietary trading firm that specializes in market-making and quantitative strategies. And while no one cooked s'mores or told ghost stories (at least none they were willing to discuss), the scene did resemble a Boy Scout campout more than a complicated trading machine. But the profits they reaped made the setup anything but primitive.

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When The World Stood Still

Flow trading refers to the concept of trading client funds instead of personal ones, which allows firms to profit from their investments and the difference in bid/ask spreads when they act as a counterparty. Flow Traders is one of these trading hubs. The company has offices worldwide but was founded and is still headquartered in Amsterdam. It is one of the biggest liquidity providers in Europe, supplying bid/ask spread price quotes in exchange-traded funds (ETFs), options, currency and cryptocurrency markets. The company is publicly traded on the Euronext Amsterdam stock exchange with annual revenue measuring nearly 1 billion euros. More importantly, it provides much-needed market liquidity through its market-making services.

Flow Traders processes a huge amount of trading activity in Europe and runs its own proprietary trading systems to make money for clients. Prop firms can profit from bid/ask spread imbalances, but other investments can be much more profitable in volatile markets. And guess what happened in early spring 2020? An extremely volatile market gripped the globe as COVID-19 circulated and governments began imposing restrictions on work and travel.

Most people in Europe began working from home as COVID-19 settled into every town and neighborhood, but Flow Traders opted for a different approach. Instead of quarantining at home, the firm's top traders decided to quarantine in the office, using tents and camping gear to isolate and keep a safe distance from each other. 

Camping Out Pays Off

Martijn Zeven of the Amsterdam outlet Quote Net posted a clip on Twitter in 2020 of the tent city setup that Flow Traders was using to keep its operation running smoothly. Tents were set up between trading desks so that employees could have quick access to their workstations but also didn't need to go far to get some sleep. The employees were able to continue serving 200 different financial markets in a time of crisis, while also turning a hefty profit for themselves. After a lackluster fourth quarter in 2019, Flow Traders profits soared in early 2020. By the end of March, Flow Traders had 10 times the trading revenue of the previous quarter, and profits jumped a stunning 3,543%. Account balances ending the quarter were 262 million euros, compared to 19 million euros in the previous quarter.

Flow Traders took advantage of a unique event (and unorthodox strategy) to juice profits during a period of uncertainty. Outside-the-box trading strategies like this have earned proprietary firms massive profits, but you don't need to camp out in your backyard to test them yourself. Platforms like Trade The Pool allow prospective prop traders to access markets with simulated capital to test their skills against other traders. Once the evaluation period is complete, traders with a passing score can move on to their own funded accounts. There's even a demo account to test whether the firm fits your trading style.

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