Proprietary trading firms are planning to expand FX trading and increase investment budgets in 2024, according to the latest Acuiti Proprietary Trading Management Insight Report.
This quarter’s report found that 45% of firms that trade FX were planning to significantly increase exposures in the asset class in 2024. Firms were also planning growth in equity options.
Almost a fifth of firms, mostly from Europe, and which traded cash equities, were planning to decrease exposures in the asset class.
In terms of new asset classes, several firms were planning to expand into cash government bond markets.
Investment budgets are also set to increase in 2024 with 63% of firms planning higher than average investments. Firms were most likely to be investing in algorithmic trading tools, connectivity to new markets, and market data.
Will Mitting, founder of Acuiti, said: “Proprietary trading firms are looking ahead to 2024 with optimism and planning expansion and increased investment.
“However, exchange costs are an increasing burden for many firms, which are trading fewer products and markets than they would if fees were lower.”
Other key findings in this quarter’s report:
- Rising exchange fees are negatively impacting what markets and products firms trade
- Awareness of the EU’s Digital Operational Resilience Act, which will come into force in 2025 remains low among affected firms
- Over half of firms that trade equity options are considering trading 0DTE on Eurex, pointing to growth in that product in 2024
The quarterly report, produced in partnership with Avelacom, is based on a survey of the Acuiti Proprietary Trading Expert Network, a group of senior executives at over 100 proprietary trading firms globally and provides insights into the key trends facing the community.
“The report reveals that proprietary trading firms are willing to invest in improving their connectivity to markets, including exploring new ones,” said Aleksey Larichev, Managing Director at Avelacom.
“This shows their plans to expand and optimize their current trading setups. It’s a positive sign that the market is in good shape and working to stay competitive. For Avelacom it means opportunities to help more trading firms gain a competitive edge with our low-latency connectivity and IT infrastructure solutions.”
