With derivatives trading in the APAC region reaching 103.5 billion contracts in 2023 and accounting for three quarters of the global tally, Asian firms’ OMS demands are evolving. BEST EXECUTION talks to Sterling Trading Tech (STT), newly launched in APAC, about how the latest trends are impacting buy-side technology demands.
Increased demand is being seen for real-time risk management capabilities and extended hours in Asia as participant demands become ever more sophisticated, according to STT.
CEO Jen Nayar told BEST EXECUTION that there has been a notable shift towards trading options as a trend in the APAC region, particularly in Korea and Singapore. The firm yesterday announced its expansion into Asia (Korea, Hong Kong and Singapore), deploying its OMS and risk solutions locally and cross-border, particularly for the US operations of Asia entities.
“Options [trading] in the Western market is quite well established,” Nayar said. “I’m seeing a shift of firms outside of the US wanting to offer access to the US market for equities and options for retail investors.”
Globally, futures and options volumes reached 137 billion contracts in 2023, according the Futures Industry Association (FIA). The APAC region had the largest increase in trading in 2023, with total volume reaching 103.5 billion contracts (up 104% on last year, although driven primarily by India).
Nayar also noted increased interest in the US equities markets among Asian firms.
“We’ve always offered access to the US equity market for our Asian clients, but we’ve certainly seen an uptick in that interest,” Nayer said. Additionally, ”some of our overseas clients are now standing up US operations as opposed to trading directly from Asia.”
“The concept of a regular trading day is kind of behind us now,” Nayar added, with US markets available on what she refers to as a “24/5” basis. As such, the order queuing system in STT’s OMS allows users to place orders at any time, the company says, with international orders receivable in real-time and outside of US trading hours.
On the increased demand for real-time risk management capabilities, Nayer commented that regulation is driving demand for improvements in the risk management space. She added that many firms’ use of “homegrown” risk management tools can prove challenging when it comes to keeping up with evolving regulation requirements, a problem that STT aims to target with its SaaS approach and capability for customisable risk controls.
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