Ìð¹ÏÊÓƵapp

Amsterdam, famous for its relaxed culture, canals and bicycles, also has a less well-known, booming High Frequency Trading industry. Amsterdam has emerged as a key hub for latency-sensitive algorithmic trading, attracting major firms due to its strategic location, access to EU financial markets, and a business-friendly environment that includes competitive tax incentives for skilled professionals. Brexit further accelerated this trend, prompting leading algorithmic and quantitative trading firms to expand their presence in Amsterdam to ensure seamless access to EU jurisdictions. As a result, the city is now home to a wide range of prominent trading firms, reinforcing the city’s status as a leading hub for systematic trading.Ìý

Amsterdam trading firms accessing the US Equity Options MarketsÌý

According to data from the Options Clearing Corporation, the US market for equity options had another record-breaking trading year in 2024 – the fifth record year in a row. The growing participation of European traders in the US equity options market, along with the emergence of new products like zero-day options, has led to a sharp increase in data traffic between Amsterdam and US exchanges. This surge has driven greater demand for robust infrastructure bandwidth to keep pace with the ever-increasing volume of data flowing through global trading systems.Ìý

Amsterdam trading firms looking to trade in the US options market face many challenges, including recent regulatory compliance, such as DORA and the ability to access reliable low-latency trading and robust market data feeds to drive trading. Systematic trading requires access to the fastest infrastructure and environments closest to where the trade is physically taking place within the relevant data center. Processing close to the source of the input data provides the lowest possible latency between input and response – and speed matters. For banks and hedge funds, market data is the lifeblood of execution decisions. Accessing high-fidelity, low-latency data with complete reliability is non-negotiable. However, building and maintaining a global network with low-latency circuits and fully diverse secondary paths can cost millions annually.ÌýÌý

Infrastructure, Connectivity and Market Data ServicesÌý

Underlying trading infrastructure is extremely expensive and requires significant technical expertise and ongoing investment. Increasingly, Amsterdam trading firms are engaging Managed Service Providers (MSPs) to provide infrastructure, connectivity, and market data services. MSPs provide much more than just migration services; they can deliver access to global financial markets, offering scalability and expertise often unavailable in-house. Choosing the right provider requires careful evaluation of their ability to scale solutions and meet expanding bandwidth demands. MSPs enable economies of scale by sharing global infrastructure and delivering services with minimal latency and maximum performance. This is especially important as financial traders’ activities intensify, requiring rapid responses during high-activity periods.Ìý

A managed solution that provides both access to and distribution of vast amounts of raw market data is of equal importance. As traders enter the market, become successful, and diversify their portfolios, their market data needs can place excessive network capacity pressures on infrastructure. Therefore, an MSP must be able to accommodate and handle sudden data bursts during high-activity periods.ÌýÌý

Finding the Right MSPÌý

Selecting the right MSP is crucial for maximizing the benefits of outsourcing. Amsterdam trading firms should look for providers that combine network scalability, low-latency connectivity, and reliable access to global financial markets, especially all markets in the US. Those that integrate application management, market data delivery, and consulting services can streamline operations and reduce costs. Ìð¹ÏÊÓƵapp is the only global provider to combine a vendor-neutral approach to market data application management, alongside end-to-end hosting, market data, and consulting services.Ìý

An MSP who can work across multiple clients, vendors, and partners provides unique advantages. For example, if one client reports an issue, such as incorrect pricing on a stock, the MSP can quickly determine whether the problem is with the exchange, an aggregator, or the client’s infrastructure. By monitoring service incidents across all clients, MSPs can identify and address problems faster than individual firms. In many cases, MSPs detect and resolve issues before clients are even aware of them.Ìý

ConclusionÌý

European trading firms must continue to evaluate their insourcing and outsourcing strategies. Especially for Amsterdam trading firms, the right MSP can be a vital partner in achieving their business goals and maintaining a competitive edge. When delivered as a fully managed Infrastructure-as-a-Service (IaaS), the complexity and cost attributed to firms ‘going it alone’ can be significantly reduced.ÌýÌý

David Mattinson works closely with Ìð¹ÏÊÓƵapp’ customers and partners across the EMEA region, supporting the expansion of the company’s networks, operations and sales activities.ÌýÌý