William Knottenbelt – The History of Financial Futures – Part One

John Lothian

John Lothian

Executive Chairman and CEO

Third Generation Commodity Trader Leads Bank Into Electronic Trading Era

William Knottenbelt said he likes to call himself a third generation commodity trader. Both his father and grandfather were commodities traders and had their own firms in Indonesia. Despite that background, Knottenbelt said he thought he wanted to be an accountant. 

That thought did not last long after he secured a job at a commodity firm and realized he wanted to be on the trading side. Czarnikow offered him a job in London, but Knottenbelt wanted to work in France, so he was sent to its  French subsidiary.

After two years in France trading molasses, he came back to London with Czarnikow to trade white sugar. It was here that he first was exposed to the futures markets, hedging and taking outright positions depending on conditions.

In 1986, the commodity markets slumped. Back in 1982, he had been offered a position in financial futures in Czarnikow when the London International Financial Futures and Options Exchange (LIFFE) opened, but he turned it down. . But by 1986, he changed his mind and took a job with NatWest on its financial futures desk as a broker.

In 1986, many of the European banks did not use futures yet, so Knottenbelt and NatWest would educate the banks and sign them up for their first futures accounts. By 1990 he was running the broking desk. At that point, NatWest started looking at expanding into the U.S. and bought the U.S. operation of Canadian investment firm, Burns Fry Futures Inc.

In the early 1990s, NatWest began to do more business in Asia and became a member of several exchanges. In 1996, NatWest bought Greenwich Capital, expanding  NatWest’s U.S. exposure, including access to the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT).

One of the many challenges of leading a growing, new, developing business in a bank is where does it fit in the organization chart?  Knottenbelt said he reported to all different kinds of divisions during his tenure, including fixed income, swaps, equities and FX.

Ultimately, he came up with a solution in 2007, which was to allocate every future  into the division of the underlying product. FX futures reported into the FX division of the bank, for example.

In the 2000s, the Royal Bank of Scotland (RBS) took over NatWest and Knottenbelt became the global head of futures for RBS, he said. 

At the same time, LIFFE was going through its transition to electronic trading from open outcry. .

Knottenbelt said RBS was able to move many of the people from the trading floor into the bank in other roles, though they lost some people. 


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