Proprietary trading firms are optimistic about 2025, with 64% of senior executives in the Acuiti Expert Network predicting an above-average year, according to the latest Acuiti Proprietary Trading Management Insight Report.
The quarterly report, which was released today and is produced in partnership with Avelacom, is based on a survey of the Acuiti Proprietary Trading Expert Network, comprising of senior proprietary trading executives from across the global market executives. The report provides insights into the key trends facing the community.
This quarter’s report highlights strong optimism for 2025, driven by expectations of increased market volatility, favorable conditions, expanded offerings, and enhanced technology infrastructure. As a result, 21% of the Expert Network predicted a well above average year with 43% expecting it to be slightly above average. Just 3% predicted a worse than average year.
However, optimism levels varied, with 47% of ultra-low latency firms predicting a well above-average year, compared to only 10% of firms using manual or hybrid strategies. 19% of firms that described themselves as predominantly algorithmic but not ultra-low latency predicted a well above average year.
This disparity between firm types is also evident in investment plans for 2025. Overall, 65% of firms said that their investment budget would be significantly (26%) or slightly (39%) above average next year. However, this included 54% of ultra-low latency firms that were planning significantly above average investments, more than double the average rate.
“These findings point to a growing divide between the top tier 1 trading firms and the tier 2 and 3 and less latency focused firms,” says Ross Lancaster, head of research at Acuiti. “As the top firms invest more in technology, there is a risk that their dominance of the market will continue to grow, further leaving behind smaller firms.”
“Looking ahead to 2025, ultra-low latency firms are more optimistic about their performance, with most expecting better results. Many are investing heavily in improving latency across existing markets, colocation infrastructure, and connectivity to new markets, as the report shows. Avelacom fits well with these trends, offering reliable low-latency solutions that provide a competitive edge for firms,” says Aleksey Larichev, CEO of Avelacom.
Overall, proprietary trading firms are targeting investment in improving latency to existing markets, market data, algorithmic trading tools and colocation infrastructure.
Other key findings in this quarter’s report include:
- Proprietary trading firms are planning to increase exposures to equity options and FX in 2025
- 71% of US-based proprietary trading firms anticipate market consolidation within the next 12 months
- A lack of diversity in customer flow is seen as the main factor holding back growth in European equity options markets
Download full report here: https://www.acuiti.io/proprietary-trading-management-insight-report-q4-2024-2/
