BSO: B3, Low Latency and the Search for Alpha

Based in São Paulo, Brazil, the B3 exchange is the largest financial exchange in Latin America, and the 9th largest stock exchange in the world, as of 2021. Formerly known as “BM&FBOVESPA”, the exchange was founded in 1890, making it one of the world’s oldest exchanges, and over the years, it has merged with other Brazilian exchanges to become what it is now known as – B3. 

B3 is home to more than 700 listed companies, and as of February 2023, the exchange’s market capitalisation sits at approximately $12 billion. Some notable companies that trade on the stock exchange include Brazilian gas company Petrobras, mining company Vale, Brazilian bank Itaú Unibanco, and Ambev, a subsidiary of the global brewing giant, Anheuser-Busch InBev. 

Supporting the trading of a wide range of financial instruments including equities, derivatives, fixed income, commodities and foreign exchange, B3 comes with attractive investment opportunities for trading firms looking for new sources of alpha. Breaking into this market, however, has been somewhat of a challenge for the global trading community, but with new, low-latency network connectivity solutions, the Brazilian market is now more accessible than ever before.  

B3 offers trading firms ample opportunity for growth and high ROI

B3 is an attractive exchange to high-frequency traders and quant funds for a number of reasons. Firstly, Brazil has a large and liquid financial market, thanks to its over 700 listed companies all trading in an array of instruments. This liquidity provides ample opportunities for trading firms to buy and sell securities in the Brazilian market. 

Secondly, the market can be highly volatile, and this volatility presents opportunities for highly profitable trades. Because of Brazil’s political climate, currency fluctuations and economic challenges, sudden movements in asset prices can be common, offering traders the opportunity to capitalise on these short-term price changes and see considerable returns as a result. 

Brazil also boasts relatively lax regulations in comparison to other countries, giving traders greater flexibility in their trading strategies. This lower regulatory risk is particularly attractive to high-frequency traders and quant funds who depend on complex algorithms and automated trading systems for executing trades.

An additional reason for B3’s attractiveness to global traders is its diversification benefits. Since Brazil’s economy and financial markets are relatively uncorrelated with other major markets around the world, the opportunities it offers for diversification can make for highly lucrative returns.

Finally, Brazil has invested heavily in its technology infrastructure, providing high-speed internet connectivity and advanced trading platforms to enable high-frequency traders and quant funds to execute trades quickly and efficiently. With a commitment to providing an unobstructed experience for traders, B3 has partnered with connectivity providers like BSO to ensure that it stays ahead in performance, security, scalability and transparency. This proactive approach to its technology infrastructure provides traders with increased confidence in the exchange’s performance capabilities. 

How BSO is enabling greater access to the Brazil Stock Exchange

With the right low-latency network connectivity, trading firms across North America and Europe can take advantage of the opportunities B3 has to offer and maximise their trading efforts in the region for optimal alpha returns. 

BSO is the lowest-latency vendor registered with the exchange, currently connecting several international traders to the Brazilian market. Our presence in Brazil, as well as Mexico, gives our trading customers the widest access to the Latin American region, with faster, more cost-effective, and reliable connectivity than what’s previously been possible. 

We’ve worked closely with B3 and EllaLink to provide strategically placed, ultra-low latency connectivity infrastructure that connects B3 with the London, Bangkok, Singapore, and Tokyo stock exchanges, effectively augmenting our existing routes out of Brazil into North America and the world. 

With our extensive experience in establishing routes to emerging markets and delivering low-latency connectivity that underpins many of our global clients’ electronic trading networks, BSO is well-positioned to ensure that any trading firm looking to access the Brazilian market has all they need to thrive in one of the world’s most promising financial services markets.

Connect to B3 quicker with low latency solutions from BSO

Trading firms are always on the lookout for new alpha-generating opportunities outside of the larger, highly competitive stock exchanges – opportunities which Brazil has in abundance. And as demand for high-frequency trading in Latin America increases, the need for reliable, low-latency connections will continue to grow. Thanks to the initiatives undertaken by EllaLink, B3 and BSO, more global players are entering the Brazilian market and seamlessly operating within this key centre of commerce for the LATAM region. 

As yet another example of how our connectivity solutions bring the global financial communities together, our products and services enable traders to tap into the possibilities on offer in emerging markets like Brazil, facilitating trades that have yet to take place in such markets. Our continued engagement with exchanges like B3 shows our commitment to providing trading firms with the most reliable access to some of the most lucrative and attractive financial centres in the world. 

If you would like to start accessing B3 using our low-latency connectivity routes, get in touch with our team of experts, or find out more about our complete global connectivity network to see which markets we provide access to.