Infrastructure

11:09 AM
Justin Grant
Justin Grant
Commentary
Connect Directly
Google+
Twitter
RSS
E-Mail
50%
50%

U.S. High-Frequency Trading Firms Look Eastward

The new gold rush is taking place in the Far East. Plagued with depressed trading volumes, brutal competition and stunted growth, high-frequency trading firms are setting their sights on the Asia-Pacific region as the U.S. and European markets stagnate.

The new gold rush is taking place in the Far East. Plagued with depressed trading volumes, brutal competition and stunted growth, high-frequency trading firms are setting their sights on the Asia-Pacific region as the U.S. and European markets stagnate.

According to a Financial News report, a number of U.S. firms - including Citadel, Getco, Jane Street Capital and Optiver - are among the firms that have tired of the technology arms race in the U.S. and Europe and are setting up shop in Asia.

From Financial News:

Tokyo is currently the leading hub for high-frequency trading firms in Asia-Pacific, where the trading practice now accounts for about 45% of trading volumes, according to Credit Suisse.

In a bid to bolster liquidity and increase high-frequency trading volumes, the Tokyo Stock Exchange launched its Arrowhead trading platform in January last year. The Tokyo Stock Exchange is under increasing competition from Chi-X Japan, the Tokyo-based alternative trading facility, which has created arbitrage opportunities for high-frequency trading firms.

Hiroshi Matsubara, a director at Fidessa in Japan, a trading technology firm, says further structural changes are afoot. A suggested tie-up between the Tokyo Stock Exchange and Osaka Securities Exchange would "create quite good microsecond arbitrage opportunities" as high-frequency trading firms would obtain access to multi-asset class trading opportunities on a single platform.

Singapore currently stands behind Japan as a leading high-frequency trading hub in the region. Getco has set up operations in the country and makes markets on the exchange, which is migrating to a new platform provided by Nasdaq OMX. The upgrade will make Singapore one of the fastest markets in the world.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
Comment  | 
Print  | 
More Insights
More Commentary
Why Settle for Less in the Front Office?
Recent research shows that sell-side firms are less than satisfied with their order management system (OMS) technology. Many front offices, however, continue to make do with their current solutions. Are they selling themselves short?
BYOD Policy: Don't Reinvent the Wheel
Financial firms still feel overwhelmed by BYOD risks and challenges. But these can be addressed by a good policy, and the guidelines are already out there.
The BYOD Challenge
Having a policy in place to manage mobile devices used by employees for work purposes is necessary in this current day.
Getting Onboarding Right in the Age of the Customer
Disparate “Frankenstein” systems slow down the onboarding process and impede customer service, says Pegasystems.
Performance Monitoring Key to Smooth Infrastructure Modernization
As banks consider how to shift infrastructure and storage solutions, they can’t afford to lose visibility into performance.
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - July 2014
In addition to regular audits, the SEC will start to scrutinize the cyber-security preparedness of market participants.
Video
7 Unusual Behaviors That Indicate Security Breaches
7 Unusual Behaviors That Indicate Security Breaches
Breaches create outliers. Identifying anomalous activity can help keep firms in compliance and out of the headlines.