Jeff Mezger, Vice President of Product Management, TNS Financial Markets
Interest from firms wanting to access venues to trade US equities during business hours in Asia continues to accelerate. To trade on overnight venues, firms need to leverage specialized technology, combining robust connectivity, rapid market data access, and a solid understanding of the opportunities and risks that come with extended hours.
Partner or Go It Alone?
To fully realize the benefits of non-traditional trading hours, many firms turn to a specialist provider like Transaction Network Services (TNS). Doing so unlocks access to the infrastructure and connectivity needed to reach emerging platforms such as MOON ATS, OTC Overnight, 24 National Exchange and Bruce ATS – a new overnight trading venue that extends 24×5 US equities trading and broadens global access to emerging exchange markets. These venues allow institutional and retail participants in different time zones to trade more flexibly and reach new opportunities.
Why Overnight Trading Matters?
Overnight sessions offer more than just extended hours. Traders can react immediately to market-moving events, such as earnings announcements, economic policy changes, or geopolitical developments, that occur outside regular market times. In some cases, reduced competition during overnight sessions can create favourable pricing opportunities. However, reduced liquidity often brings higher volatility, so firms must balance agility with appropriate risk management.
Critical Success Factors
To operate effectively in overnight markets, firms should prioritize:
- Ultra-reliable connectivity to ensure continuous uptime across time zones
- Low-latency market data feeds for rapid decision-making
- Regulatory readiness to stay compliant with evolving market rules
- Scalable infrastructure that can grow with trading demand
Partnering with a specialist enables access to shared infrastructure services – delivering expertise, technology, and performance at the fraction of the cost of building in-house. Firms can lease space and connectivity that fit their exact needs, tapping into a global network to trade wherever opportunities arise. Partnering with a specialist also keeps them aligned with evolving regulations and compliance requirements for overnight trading.
The Role of Managed Service Providers
Achieving trading success in overnight markets requires more than just venue access. Some firms will need powerful servers located near exchange matching engines, supported by high quality network connections and data lines. Real-time market data from multiple overnight venues is crucial for informed trading decisions, while direct low-latency links to liquidity pools enable firms to act the moment opportunities arise. Processing trades close to the source minimizes delay and, in this environment, milliseconds can mean the difference between losing or gaining thousands.
Other firms may look to trade these new markets from their existing overseas locations, such as data centers across the Asia-Pacific region. Here a Managed Service Provider can assist. Building out a global backbone to transport US ATS market data to Asia is technically complicated and expensive. Submarine cable systems in the APAC region experience more outages than cable systems in other regions, so designing a network to ensure sufficient diversity and maximum reliability requires careful design and leads to increased costs. Capacity is much more expensive in this region as well, so designing a network to carry market data can be cost prohibitive for many firms that look to go it alone.
Managed Service Providers (MSPs) make this possible by offering:
- Prime positions within major data centers
- Flexible leasing options for fully serviced equipment
- On-site, expert support
- Integrated application management, market data delivery, and consulting services
- Global backbone low latency network backbone, capable of providing US market access to overseas locations
The most effective MSPs pair network scalability, low-latency connectivity and dependable access to global markets – particularly all major US venues – helping firms operate more efficiently and reduce costs. TNS uniquely combines a vendor-neutral approach to market data application management, with comprehensive end-to-end hosting, market data, and consulting services.
Conclusion
Connecting to overnight trading venues demands a multi-faceted approach that blends specialized technology, robust connectivity, timely market data, and a strong understanding of the risks and opportunities associated with extended trading hours. By applying industry best practices, selecting the right infrastructure partners, and embracing scalable solutions, firms can position themselves for sustained success in the fast-evolving financial markets.
Jeff Mezger is Vice President of Product Management at TNS with responsibility for its managed services for the financial industry. He oversees product development and strategy for market data, online and data center services.
