As market activity becomes more volatile and less tied to traditional trading hours, quantitative trading firms are increasingly being constrained by the limits of their trading infrastructure.
A report from Acuiti and Exegy has revealed that three quarters (74%) of quantitative trading firms have experienced issues with their market data infrastructure in high-volatility markets.
Only a minority of firms reported fully stable market data systems under volatile conditions. Almost a quarter (21%) responded that their market data infrastructure was ‘very stable even in high volatility,’ while 40% confirmed that they may experience some latency spikes ‘sometimes, in very rare cases’, and a further 26% reported that they had ‘at times dropped market data’.
Furthermore, 12% indicated they had ‘absolutely’ experienced complete outages/failures during peak volatility’.
If you fail to prepare…
The report also delved further into how quant trading firms are planning for their future and their expectations as data volumes continue to increase.
Less than a third (29%) of respondents believe their current front-office infrastructure is capable of processing the market data volumes expected by 2030 without further investment.
A further 43% said their systems would ‘possibly’ cope, while 27% confirmed that they would not. The report further highlighted the impact of periods of sharp market moves, which are generating sudden surges in data traffic that can exceed normal daily averages by multiples, placing strain on feed handlers and downstream systems.
The front-office function most frequently reported to degrade under these conditions was ‘market data processing’, followed by ‘network infrastructure’ and ‘order execution’.
The impact on performance is already visible. Only 3% of respondents confirmed that they captured ‘all’ available opportunities during recent volatile episodes, while 16% stated that they missed ‘many’ opportunities and 38% responded that they missed ‘some’.
Speaking to the significance of the findings, Ross Lancaster, head of research at Acuiti, said: “Volatility has been an ever-present factor in global markets since 2020, and this is presenting both significant opportunity and also challenges for quant firms. This research suggests that firms are increasingly missing opportunities not because of strategy, but because their infrastructure cannot absorb today’s volumes and structural complexity.”
Liquidity shifts
Factors including the potential for extended exchange trading hours, the growth of off-exchange trading venues and rising global participation are redistributing liquidity into overnight and out-of-hours sessions, particularly in US equities.
According to Acuiti, some estimates suggest that around half of US equity trading activity now takes place off-exchange, “driven by a sustained shift toward alternative trading systems (ATSs), internalisers and other non-exchange venues”.
Firms that built their technology stacks around the traditional US trading window are now facing a market where meaningful price formation increasingly occurs outside the established hours.
Survey respondents reported thinner liquidity on traditional venues during parts of the trading day, alongside missed opportunities as activity migrates to alternative venues and different time zones. Acuiti further suggested that a combination of higher average volumes, unpredictable surges and longer trading days is eroding the margin for error in front-office systems.
As market data volumes continue rising, quantitative trading firms are demontrably cognisant of the importance of future-proofing their market data and trading infrastructure.
The ‘2026 state of trading infrastructure’ report by Acuiti and Exegy included responses from 61 quantitative trading firms globally, alongside interviews with senior trading and technology professionals.