Proprietary trading firms demonstrated strong operational resilience during the heightened market volatility of the first quarter of 2026, according to the Proprietary Trading Management Insight Report published by Acuiti in partnership with Avelacom. The report, based on surveys conducted across Acuiti's global network of senior proprietary trading executives, revealed that sustained investment in infrastructure, connectivity, and risk management allowed most firms to maintain operational stability despite severe market stress tied primarily to Middle East conflict. Simultaneously, the research exposed emerging strains surrounding market data infrastructure, execution systems, and workforce dynamics as artificial intelligence begins influencing hiring decisions across the sector.
Infrastructure Resilience During Q1 Volatility
The opening quarter of 2026 brought sharp increases in market volatility across multiple asset classes as geopolitical tensions intensified in the Middle East. According to the report, 83% of respondents said their firms maintained strong overall operational performance during stressed market conditions, suggesting that many proprietary trading firms successfully absorbed large increases in market activity without major systemic disruption.
However, the survey exposed infrastructure bottlenecks that emerged under pressure. More than half of respondents, representing 54%, reported issues involving market data feed capacity and latency. Another 46% experienced problems involving order management systems and execution infrastructure.
Ross Lancaster, Head of Research at Acuiti, commented: "Proprietary trading firms once again demonstrated the resilience that comes from sustained investment in technology and risk management infrastructure. While the market stress of Q1 2026 exposed some bottlenecks around data and execution, the overall picture is one of an industry that is well-equipped to operate under pressure."
The findings reflect how infrastructure quality increasingly determines trading performance during volatile market environments where milliseconds of latency and data reliability can materially affect profitability and risk exposure.
Artificial Intelligence Reshaping Workforce Strategy
The report highlighted early signs that artificial intelligence is beginning to reshape workforce strategy across proprietary trading firms. Nearly half of respondents said AI adoption had already slowed hiring activity inside their organizations. At the same time, only 15% reported actively reducing headcount because of AI-related productivity gains.
Proprietary trading firms increasingly use AI across quantitative research, signal generation, risk analysis, execution optimization, and operational automation. The survey indicates firms currently focus more on slowing workforce expansion than replacing large portions of existing staff, suggesting the sector remains in an early transitional phase where firms increasingly integrate AI into workflows but have not yet aggressively reduced staffing levels.
AI adoption arrives during a period where many trading firms already face pressure to control operational costs while maintaining increasingly sophisticated infrastructure environments. The broader implication is that proprietary trading firms may increasingly favor smaller, highly technical teams augmented by AI-assisted research and execution systems.
Digital Asset Participation Continues Expanding
The report found continued institutional interest in digital asset markets among proprietary trading firms. According to the survey, 44% of firms already participate in digital asset trading in some form, while another 24% said they are actively evaluating entry into the sector.
Alpha generation remains the dominant motivation among firms already trading digital assets, cited by 69% of respondents. Portfolio diversification also remained a significant factor supporting participation. At the same time, regulatory uncertainty continues limiting broader institutional expansion, particularly in the United States.
Engagement with decentralized finance remains comparatively limited. Only 31% of firms active in digital assets currently trade on DeFi platforms. Respondents cited insufficient institutional liquidity depth and regulatory uncertainty as the largest barriers preventing wider DeFi participation. The findings reinforce how institutional trading firms increasingly distinguish between broader digital asset markets and decentralized finance infrastructure specifically.
Latin America Emerges as Expansion Focus
The report identified Latin America as an increasingly important growth region for proprietary trading firms. Only 11% of surveyed firms currently operate in Latin American markets outside Brazil. However, 29% said they are actively evaluating expansion opportunities across the region, with Mexico emerging as the primary focus among firms considering entry.
Respondents identified connectivity infrastructure and co-location setup as the largest operational barriers preventing faster regional expansion. Aleksey Larichev, Chief Executive Officer of Avelacom, commented: "One of the most interesting findings in this report is how infrastructure bottlenecks continue to emerge during volatility events – particularly around market data delivery, execution infrastructure and exchange connectivity."
The report also found that approximately one-third of firms are increasing directional trading activity, driven partly by stronger quantitative signals and reduced profitability in pure market-making strategies.
Key Takeaway
Proprietary trading firms increasingly evolve into highly infrastructure-driven organizations operating at the intersection of AI, low-latency connectivity, digital assets, and global market expansion. As trading environments become faster and more technologically complex, firms capable of scaling resilient infrastructure while adapting workforce strategy and market positioning face significant competitive advantages across the next phase of global electronic trading.
