In 2025, the proprietary trading landscape is undergoing significant transformations. As the industry grapples with new challenges and opportunities, understanding the current state of this sector is essential. Have you ever wondered how the shift towards 24/7 trading is impacting proprietary traders? Or what factors are shaping market dynamics today? This article delves into recent findings, highlighting key trends and insights from industry leaders, and explores the future direction of proprietary trading.
The Shift Towards 24/7 Trading: Perspectives and Concerns
One of the most pressing discussions in proprietary trading is the potential move to a 24/7 trading environment. This shift has elicited mixed reactions among traders. Notably, 37% of survey participants expressed optimism, while a similar proportion, 38%, voiced reservations. This divide reveals a nuanced landscape where some traders see opportunities, while others remain cautious.
Interestingly, support for 24/7 trading is more pronounced in the US compared to Europe. Traders equipped with cutting-edge technology tend to favor the change, citing benefits such as:
However, concerns loom large. Over 80% of respondents highlighted staffing and operational challenges as significant hurdles. Additional worries include the costs of infrastructure, intricate risk management, and liquidity issues.
Future Outlook on 24/7 Trading
While a substantial 80% believe that 24/7 trading will materialize, opinions vary on the timeline. Among those optimistic, 27% anticipate implementation within three years, while 34% foresee it taking up to five years. Some remain skeptical, with 20% believing it may never happen. This spectrum of opinions underscores the uncertainty surrounding the future of trading hours.
Exchange Liquidity Programs: Trends and Insights
The conversation also extends to exchange liquidity provision schemes. Notable exchanges such as CME, SGX, and Eurex have been identified as frontrunners in this area. Traders appreciate competitive incentives and clear guidelines, though there are concerns about market makers potentially exploiting these programs.
Suggestions for enhancement include:
Eurex’s handling of EURO STOXX 50 Index Options is frequently cited as a model worth emulating.
Performance Review: Insights from H1 2025
The first half of 2025 brought a mixture of successes and challenges, heavily influenced by market volatility and regulatory factors. One significant hurdle was attracting talent with expertise in both trading and artificial intelligence, a skill set increasingly in demand.
Despite these obstacles, over 80% of firms reported improved performance compared to the prior year, with a staggering 90% faring better than in an average year. Profit opportunities were notably found in:
Regions like Asia, South America, and North America emerged as hotspots for growth.
Emerging Trends: Hot Topics in Trading
Among the emerging trends, there is a growing interest in listed FX options. Traders are advocating for a shift from over-the-counter (OTC) to listed markets, highlighting the benefits of standardization and reduced counterparty risks. However, the flexibility and liquidity of OTC markets still have their proponents.
Additionally, liquidity issues have been reported in CME’s agricultural contracts. While half of the respondents noted some difficulties in the past year, only a small percentage described these challenges as significant.
Market Dynamics: Fastest-Growing Exchanges
The Avelacom Exchange Growth Index has identified several rapidly expanding venues, including Guangzhou Futures Exchange and the Pakistan Mercantile Exchange. New contracts generating excitement span various sectors, including:
Kraken’s Strategic Vision for the Future
In a recent Q&A, Shannon Kurtas, Head of Exchange at Kraken, shared insights into the firm’s ambitious plans. They aim to diversify beyond cryptocurrencies and venture into equities and tokenized assets. Kurtas emphasized the importance of tokenization for collateral efficiency and pointed to Europe’s MiCA framework as a potential regulatory model.
With rising competition in the perpetual futures market, Kraken is poised to adapt, highlighting how traditional and digital markets are converging more than ever.
In summary, the proprietary trading sector in 2025 is navigating a landscape filled with opportunities and challenges. As the debate over 24/7 trading continues and new market dynamics emerge, staying informed will be crucial for traders looking to thrive in this evolving environment.
