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So, here’s the thing...
If you have been following the tech story for the last decade, you have been trained to look at a very specific, very small patch of real estate in Northern California. But as we sit here in early 2026, the "connect-the-dots" moment for investors is this: the AI trade has stopped being about shiny software demos in Palo Alto and has started being about the physical industrialisation of compute.
Want to know more? Read our 2026 AI playbook
What changed, and why it matters
We have entered the "Year of Proof". The world’s largest companies, the hyperscalers, are projected to spend a staggering US$650 billion on capital expenditures this year. But here’s the part most people miss: that money is not staying in Silicon Valley. It’s flowing to the "picks and shovels" players in Idaho, Washington, Colorado and even overseas.
If you want to understand where the actual return on investment (ROI) may be landing this earnings season, you have to look outside the 650 area code. The shift from AI hype to AI industrialisation is changing the map.
Five companies · AI infrastructure play · 2026
The full AI stack: from capex to consulting
Infrastructure builders compared to the implementation bridge across the AI value chain
Hyperscaler CapEx: Early 2026 analyst estimates, midpoint of ranges. Amazon approx. 100% YoY, Alphabet approx. 100%, Meta approx. 87%, Microsoft approx. 50%.
Accenture: Cumulative advanced AI bookings $11.5B through Q1 FY2026. Q1 AI bookings $2.2B (up 76% YoY), AI revenue $1.1B (up 120% YoY) across 1,300+ clients.
Five companies shaping the next phase of AI
Micron Technology (MU), Boise, Idaho
Micron is the "memory backbone" of the current cycle. While everyone was watching the chip designers, many overlooked the fact that AI chips are far less useful without high-bandwidth memory (HBM). Micron is currently viewed by some analysts as a strong buy because its capacity is reportedly sold out through the end of 2026. Analysts are also eyeing a 457% jump in earnings per share (EPS) as the memory cycle reaches what some describe as a robust peak.
Microsoft (MSFT), Redmond, Washington
Microsoft is the enterprise backbone of this transition. It has moved beyond simple chatbots and is now building what analysts call "Intelligence Factories". While the stock has faced pressure recently over capacity constraints, underlying demand for Azure AI is reportedly still running ahead of capacity. The broader bull case is that Microsoft is moving into "Agentic AI", systems that do not just talk to users but may also execute multi-step business workflows.
Which Asian companies are betting big on artificial intelligence?
Amazon (AMZN), Seattle, Washington
Amazon is playing a long-term game of vertical integration. To reduce its reliance on expensive third-party hardware, it’s building its own AI chips in-house. Amazon Web Services (AWS) remains the primary driver of profitability, and the company is using its retail data to train specialised models that many Silicon Valley start-ups may struggle to replicate.
Palantir Technologies (PLTR), Denver, Colorado
If Micron provides the memory and Microsoft the platform, Palantir provides the "operating system" for the modern AI factory. The company has posted strong momentum, with US commercial sales recently growing 93% year over year. It’s often framed as a bridge between raw data and corporate profitability, which remains a key focus for investors in 2026.
Accenture (ACN), Dublin, Ireland
You cannot just "plug in" AI. Businesses often need to redesign processes around it, and that’s where Accenture comes in.
The company is viewed as an implementation bridge, with one analyst arguing that "GenAI needs Accenture" to move from pilot programs to production though the cautionary angle is that the AI story has not fully excited investors here yet because consulting revenue can take longer to show up than chip sales.
What could happen next?
The chart maps the three time horizons likely to shape the next phase of the AI industrialisation trade.
In the near term, markets are still reacting to chipmaker earnings, guidance, and any signs of capacity strain. Over the next month, attention shifts to the real-world inputs behind AI growth, especially power, financing, and infrastructure. By the 60-day window, the key question is whether AI spending is broadening into a wider market re-rating or running ahead of near-term returns.
Across all three periods, the focus is the same: proof. Investors are looking for signs that AI capital expenditure is translating into real demand for energy, land, and industrial capacity. That is why updates from companies tied to power and data centre buildout matter more than ever.
Scenario planning · March 2026
What could happen next
Three time horizons, three scenarios to watch across the AI industrialisation cycle
Chipmaker reports
Possible
Market volatility continues as traders digest the latest reports from chipmakers like Micron
Upside scenario
"Bulletproof" guidance from remaining infrastructure names triggers a sector-wide relief rally
Watch for
Any mention of "capacity constraints" or "supply bottlenecks" in earnings calls
Energy and rates
Possible
Focus shifts to "real economy" energy players like NextEra that power the data centres
Downside scenario
Rising oil prices from Middle East conflict act as a tax on tech margins, rotating into defensives
Action point
Monitor Fed language on rates. Higher for longer makes $650B capex bills far more expensive to finance
The great dispersion
Possible
Market rewards companies with real AI revenue and punishes those still stuck in experimentation
Upside scenario
NextEra Energy (NEE) data centre announcements in late April/May trigger a utility renaissance rally
Downside scenario
An "air pocket" in profits occurs where debt-funded investment outpaces revenue gains
Watch
May reports from Texas Pacific Land (TPL) — is data centre land demand still "red hot"?
Action point
Review your portfolio for geographic diversity. The AI story is now a global power race
The psychological trap
The emotional trap many traders fall into right now is recency bias. You have seen NVIDIA and the "Magnificent 7" win for so long that it feels like they are the only way to play this. But the "obvious" trade is often the one that has already been priced in. Before acting, ask yourself: "Am I buying this stock because I understand its role in the physical AI supply chain, or because I’m afraid of missing the next leg of a rally that started two years ago?"
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Disclaimer: This content is general information only and should not be relied on as personal financial advice or a recommendation to buy, sell, or hold any financial product. References to companies or themes, including AI-related stocks, are illustrative only. Share and derivative markets can move sharply, and concentrated sectors such as AI and technology may experience elevated volatility, valuation risk, and liquidity risk. If you trade derivatives such as CFDs, leverage can magnify both gains and losses. Past performance is not a reliable indicator of future performance.
After three consecutive years in which mega-cap AI-linked names carried the Nasdaq, the mix of winners may be starting to change.
2026 is the "show me the money" year. Any hint of doubt about whether tech companies were correct to spend nearly US$700 billion on AI last year could have a major impact on market sentiment.
Quick facts
- Global AI capex is projected to exceed US$600 billion in 2026.
- The total addressable market (TAM) for AI data centre systems is estimated to exceed US$1.2 trillion by 2030.
- Nvidia, Microsoft and TSMC are all trading below analyst fair value estimates, despite surging revenues.
- Broadcom's AI chip division is targeting US$100 billion in AI revenue by 2027.
What is powering the AI trade?
Multiple macro forces are likely to underpin the AI investment theme through 2026. The direction of US interest rates, the scale of AI infrastructure spending and the geopolitical backdrop are all likely to matter.
Rates and valuations
The Federal Reserve delivered 75 basis points (bps) of rate cuts in 2025, and markets expect another 50 bps in 2026. Lower rates can reduce the discount applied to future tech earnings and typically support growth stocks, including AI-linked names.
Infrastructure spending and earnings expectations
On the spending side, Nvidia CEO Jensen Huang has said data centre operators could spend up to US$4 trillion annually by 2030, and AI capital spending is projected to reach US$571 billion in 2026 alone.
However, markets appear to have already priced in much of this optimism. Analysts are projecting 14% to 16% annual earnings per share (EPS) growth in 2026. That would require S&P 500 stocks outside the Magnificent 7 to roughly double the pace of earnings growth recorded in 2025.
Geopolitics and export controls
Geopolitics could also shape the outlook. US-China export controls on AI chips, along with reduced access to key international buyers, could weigh on data centre growth projections.
Top AI-linked stocks
Nvidia (NVDA)
Nvidia remains the clearest expression of the AI trade. It holds a wide economic moat thanks to its market leadership in GPUs, hardware, software, and networking tools.
Goldman Sachs and Morgan Stanley both carry price targets near $250 on NVDA, with Goldman's call based on a 2027 revenue forecast of over $380 billion. Bank of America sits in the $275 camp, effectively pricing in more AI upside on 2027 earnings.
At 21.6 times forward earnings, Nvidia is now trading below the broader S&P 500's multiple. Key risks include the overhang from US–China export restrictions and any softening in data centre capex guidance from major cloud providers.
Microsoft (MSFT)
Microsoft is down around 25% from its all-time high. During the second quarter of fiscal year 2026, Azure's revenue increased 39% year over year, and the company holds a US$625 billion backlog of contracted usage still to come.
The gap between the stock's recent performance and its underlying revenue growth has drawn attention from analysts, though elevated valuations across the broader tech sector remain a risk to watch.
Broadcom (AVGO)
While Nvidia makes broad-purpose GPUs, Broadcom is winning business by going bespoke, designing custom AI chips tailored specifically to the needs of individual hyperscalers like Google and Meta.
During Q1 of FY2026, Broadcom's AI semiconductor division grew at a 106% pace to US$8.4 billion, and by the end of 2027 it expects its AI chip revenue to reach more than US$100 billion.
Broadcom trades at a significant premium to the broader market, which could amplify any downside if growth expectations are not met.
TSMC (TSM)
Almost every major AI chip is manufactured by TSMC. The company holds approximately 70% market share in chip foundry, making it the single most critical piece of infrastructure in the entire AI supply chain.
TSMC sales are projected to increase by 30% in 2026, with gross margins expected to remain above 60% as new fabrication capacity comes online.
The primary risk is geopolitical: any escalation in Taiwan Strait tensions could weigh heavily on the stock regardless of its underlying fundamentals.
Vertiv (VRT)
Less prominent than the semiconductor giants, Vertiv provides the power management, cooling, and data centre infrastructure that keeps AI hardware running.
Nvidia, Broadcom, and Vertiv sit at different points in the AI build-out, including compute, custom silicon, networking and physical infrastructure.
Vertiv's revenue is tied to overall AI capex rather than any single chip maker, which gives it a different risk profile to the names above.
Corning (GLW)
Corning's stock rose 84% in 2025 thanks to surging demand from data centres for its fibre optic cables. Its optical communications segment has grown 69% YoY.
At a Price-to-Earnings (P/E) ratio of roughly 37x, Corning trades at a discount to Nvidia and Broadcom while still carrying direct exposure to AI infrastructure spending. However, its valuation depends heavily on continued capex from the major hyperscalers.
US market drivers for March 2026
AI trades beyond the headline stocks
Energy and utilities
Training large-scale AI models is extraordinarily energy-intensive. A typical 1 gigawatt AI data centre facility requires upwards of US$60 billion in capital expenditure, with roughly half going directly to hardware. Utilities exposed to data centre power demand could also be affected by the AI build-out.
International spillover
South Korea's Kospi surged 76% in 2025 due to AI-linked chipmakers like SK Hynix. Japan's Topix, Germany's DAX, and the UK's FTSE 100 also saw gains of more than 20%. Memory supplier Kioxia was the world's best-performing stock, surging 540%.
Data centre infrastructure
Companies like Emcor, which provides critical electrical, HVAC, and power infrastructure to data centres, reported its contracted backlog surged 31.2% year over year to a record US$13.25 billion. These companies can offer different exposure to the AI capex cycle, but they carry their own execution, backlog, margin and valuation risks.
What could derail the AI trade?
Valuation compression
Broadcom trades at about 50x earnings and AMD at 56x. Any disappointment in forward guidance could trigger a sharp contraction in multiples.
The return on investment test
Companies are investing today on the assumption that highly profitable business applications of AI will emerge over time. If the timing or scale of those returns disappoints, the AI trade could face pullbacks.
Index concentration
The 10 largest stocks in the S&P 500 account for about 40% of the index's total value. A rotation out of mega-cap tech could disproportionately affect broad indices.
Efficiency disruption
China's DeepSeek recently published research suggesting large language models may be developed more efficiently than previously assumed. If AI can be built with less compute, demand for GPUs and data centre hardware could fall short of current forecasts.
Bottom line for traders
The AI trade is maturing but far from over. 2026 is shaping up to be a more nuanced chapter, spreading across the full AI value chain.
The US earnings season will be closely watched for evidence that the hundreds of billions being poured into AI infrastructure are beginning to generate the anticipated returns.
All data points referenced in this article were verified against primary sources on 18 March 2026.
Latin America recorded $730 billion in crypto volume in 2025. Across the region, 57.7 million people now own some form of digital currency rankingslatam, a base that is growing faster than anywhere else in the world
As institutional capital arrives and regulation matures, these are the publicly traded names investors are watching closest.
Why LATAM is a crypto powerhouse right now
Top LATAM crypto stocks to watch
1. Nu Holdings (NYSE: NU)
Digital banking · 127M users across Brazil, Mexico and Colombia
Nubank could be one of the most direct listed proxies for LATAM's fintech and crypto boom. The company integrated cryptocurrency trading directly into its Nu app and partnered with Lightspark to embed the Bitcoin Lightning Network for faster and more cost-effective Bitcoin transactions.
In Q3 2025, revenue jumped 42% year-on-year to $4.17 billion, customer deposits rose 37% to $38.8 billion, and gross profit was up 35% to $1.81 billion.
The stock has returned roughly 36% over the past year and tripled the S&P 500's returns over the last three years. The company dominates Brazil, with over 60% of the adult population using Nubank.
Nu Holdings also recently secured conditional approval to launch Nubank N.A., a US national digital bank. However, the announcement triggered a pullback, with investors cautious about capital deployment timelines and expansion costs.
UBS has lowered its price target to $17.20, citing some market caution despite positive operational shifts.
What to watch
- Credit quality trends in Brazil and Mexico.
- Pace of USDC adoption via Nubank rewards.
- US bank charter timeline and early cost disclosures.
2. MercadoLibre (NASDAQ: MELI)
E-Commerce/Fintech · 18 countries across Latin America
MercadoLibre is not a pure crypto play, but Mercado Pago (its fintech arm) has become one of the most important financial rails in LATAM. The company holds around 570 BTC on its balance sheet as a hedge against regional inflation, and has issued its own US dollar-pegged stablecoin, Meli Dólar.
Full year 2025 net revenue from Mercado Pago reached $12.6 billion, up 46% year-on-year, while total payment volume hit $278 billion, up 41%. Fintech monthly active users have grown close to 30% for ten consecutive quarters, and the credit portfolio nearly doubled to $12.5 billion year-on-year.
The catch for MercadoLibre is profitability. Overall margin compression of 5–6% is attributed to persistent investments in free shipping, credit card expansion, first-party commerce, and cross-border trade.
The stock has declined around 14.5% over the past six months, with the market repricing the stock around what management has framed as a deliberate investment phase heading into 2026.
The longer-term case remains compelling. Mercado Pago has introduced crypto-asset management and insurance products across its core markets, positioning it less as an e-commerce company and more as a full-scale digital bank with crypto infrastructure built in.
What to watch
- Mercado Pago loan loss trends and credit portfolio quality.
- Stablecoin integration and crypto volume through its payment network.
- Whether the Argentina credit card launch can reach profitability.
3. Méliuz (B3: CASH3.SA)
Fintech/Bitcoin treasury · Brazil's first listed Bitcoin treasury company
Méliuz is the most direct equity expression of the corporate Bitcoin treasury trend in LATAM. In early 2025, Méliuz became the first publicly traded company in Latin America to formally adopt a Bitcoin treasury strategy, receiving shareholder approval to allocate cash reserves toward Bitcoin accumulation.
Rather than issuing cheap dollar-denominated debt to buy BTC, Méliuz uses share issuance and operational cash flow. The company also sells cash-secured put options on Bitcoin to generate yield, a playbook borrowed from Japanese Bitcoin treasury firm Metaplanet, keeping 80% of BTC holdings in cold storage
CASH3 essentially acts as a leveraged vehicle for BTC exposure, capturing upside intensely in bull cycles, but generating greater volatility on the way down, especially where debt is involved.
The stock surged approximately 170% in May 2025 following the announcement of the Bitcoin strategy. However, it has since pulled back to its April 2025 levels, broadly tracking Bitcoin's price action and highlighting the stock's volatility.
What to watch
- Bitcoin price direction.
- BTC per share metric.
- Expansion of yield-generation strategies
- Any moves to list shares internationally.
4. OranjeBTC (B3: OBTC3.SA)
Pure-play Bitcoin treasury · LATAM's largest corporate Bitcoin holder
Where Méliuz is a fintech business that also holds Bitcoin, OranjeBTC is the opposite: a company whose entire purpose is Bitcoin accumulation.
The company listed on B3 in October 2025 through a reverse merger with education firm Intergraus, marking Brazil's first public debut of a firm whose business model centres entirely on Bitcoin accumulation.
OranjeBTC currently holds over 3,650 BTC and raised nearly $385 million in Bitcoin, with backing from notable investors including the Winklevoss brothers, Adam Back, FalconX, and Ricardo Salinas.
Its $210 million financing round was led by Itaú BBA, the investment arm of Brazil's largest bank, in a significant vote of institutional confidence.
In 2026, OBTC3 has fallen around 32% year-to-date, making it the hardest-hit of the two Brazilian Bitcoin treasury stocks. The stock hit an all-time high of 29.00 BRL on its listing day (October 7, 2025) and an all-time low of 6.06 BRL in February 2026.
It currently trades around 7.06 BRL, a steep discount to its debut, but one that closely mirrors Bitcoin's own pullback from peak levels.
OranjeBTC is the most volatile name on this list and should be treated as a high-beta Bitcoin vehicle. Liquidity is thinner than established names.
What to watch
- Bitcoin per share trajectory.
- Any capital raises or new BTC purchases.
- Potential international listing ambitions.
- How the market-value net asset value (mNAV) discount/premium evolves relative to Bitcoin's price.
5. Hashdex — HASH11 (B3: HASH11)
Crypto Asset Management · Brazil's leading crypto ETF issuer
Hashdex offers a different kind of exposure to crypto. Rather than a single company's balance sheet or business strategy, HASH11 is a diversified basket of crypto assets wrapped in the familiarity of a regulated Brazilian ETF structure.
Brazil hosts 22 ETFs offering full or partial exposure to crypto assets, with Hashdex funds attracting 180,000 investors and daily transaction volumes averaging R$50 million.
Hashdex launched the world's first spot XRP ETF (XRPH11) on Brazil's B3 in April 2025, tracking the Nasdaq XRP Reference Price Index and allocating at least 95% of net assets to XRP.
The company also operates single-asset ETFs for Bitcoin (BITH11), Ethereum (ETHE11) and Solana (SOLH11), alongside its flagship HASH11 multi-asset index fund.
In mid-2025, Hashdex launched a hybrid Bitcoin/Gold ETF (GBTC11) that dynamically adjusts allocations between the two assets.
For investors who want diversified crypto market exposure rather than single-asset risk, HASH11 is the most accessible on-ramp through Brazil's regulated equity infrastructure.
However, as a multi-asset crypto index, HASH11 is still subject to the broad performance of digital asset markets. And unlike the equity names on this list, there is no operating business creating independent value.
What to watch
- Crypto market sentiment broadly.
- Potential expansion of Hashdex products into the US market.
- AUM growth as institutional adoption accelerates in Brazil.
- Relative performance of HASH11 vs single-asset alternatives.
What to watch next
Institutional infrastructure is still in early innings — Deutsche Börse's Crypto Finance Group entered LATAM in early 2026, and local exchanges have opened over 200 BRL-denominated trading pairs since 2024. The pace of that buildout will set the tone for all five names.
Regulatory progress in Brazil, Mexico, and Chile is the key enabler for the next wave of capital. Any setbacks would hit the higher-beta names like OBTC3 and CASH3 hardest.
Stablecoin volume is the region's most reliable real-time signal. Despite a global slowdown in early 2025, LATAM still recorded $16.2 billion in trading volume between January and May, up 42% year-on-year. Watch whether that momentum holds — a reacceleration lifts all five; a reversal pressures them equally.
From AI infrastructure to pet care, semiconductors, and gold exploration, here are the five top candidates most likely to list on the ASX in 2026.
What is an Initial public offering (IPO)?
1. Firmus Technologies
Firmus Technologies is building AI-powered data centre infrastructure in Tasmania, and it may be one of the most strategically positioned tech companies in Australia right now.
Firmus is an Nvidia Cloud Partner and has joined the GPU maker's Lepton marketplace. The company has designed its modular, liquid-everywhere AI Factory platform to evolve with Nvidia's latest architectures, including Nvidia Spectrum-X Ethernet networking.
A September 2025 raise of A$330m closed at a post-money valuation of A$1.85 billion for the company. By November 2025, after a further A$500m raise, that valuation had trebled to approximately A$6 billion.
A subsequent A$100m investment from Maas Group in early 2026 confirmed the November valuation. Firmus is reported to be contemplating an ASX IPO within the next 12 months and, given the A$6 billion private valuation, any public raise is expected to be well above A$1 billion.
With Australia's growing demand for sovereign AI compute capacity and Tasmania's cool climate and renewable energy advantage for large-scale data centre operations, Firmus stands as one of the largest-scale ASX IPO candidates in 2026.
However, although market interest in Firmus appears to be growing, timing is everything when it comes to IPOs. Watch for confirmation of exact IPO timing, AI data centres sentiment, and whether Nvidia signals deepening its involvement as a strategic anchor investor post-listing.
2. Rokt
Sydney-founded Rokt has quietly become one of Australia's most valuable private tech companies. The e-commerce adtech platform aimed at helping brands monetise the “transaction moment” is now valued at ~US$7.9 billion.
A term sheet prepared by MA Financial projected an exit share price of US$72 under base-case scenarios, when shares are freed from escrow in November 2027.
Rokt is expected to potentially dual-list in the US and on the ASX in 2026, possibly as soon as the first half of the year. IG The most widely discussed structure is a primary Nasdaq listing with an ASX CDI (CHESS Depositary Interest) structure for Australian investors, rather than a full dual listing.
Rokt’s revenue for the year ending August 2025 is projected at US$743m (up 48% year-over-year), with EBITDA forecast at US$100m and a gross profit margin of approximately 43%. It is currently projected to cross the $US1 billion annual revenue milestone by August 2026.
Amazon, Live Nation, and Uber are all reported to be Rokt customers, and the company has expanded rapidly across North America and Europe.
Whether Rokt opts for a primary Nasdaq listing with an ASX CDI structure, or a full dual listing, could significantly affect liquidity and local investor access.
3. Greencross
Greencross, the business behind Petbarn, City Farmers, and Greencross Vets, is preparing to relist on the ASX after being taken private by US private equity firm TPG in 2019.
TPG currently owns 55% of Greencross, while AustralianSuper and the Healthcare of Ontario Pension Plan (HOOPP) hold the remaining 45%.
The company reported revenue of A$2 billion for the 2025 financial year, a modest increase from A$1.95 billion in 2024. TPG paid A$675 million in equity value for the business in 2019; it sold a 45% stake in 2022 at a valuation of more than A$3.5 billion. The proposed IPO implies a valuation of more than A$4 billion.
TPG is targeting an initial public offering of at least A$700 million. The IPO will mark Greencross's return to the ASX after an eight-year absence. TPG's relatively small raise size suggests the firm is banking on strong aftermarket performance before fully exiting.
TPG's exit timeline announcement is still a watch for whether a 2026 IPO is on the cards. And whether the company pursues a traditional IPO or a trade sale, which remains an alternative path.
4. Morse Micro
Morse Micro is a Sydney-based semiconductor company developing Wi-Fi HaLow chips designed for IoT applications across agriculture, logistics, smart cities, and industrial monitoring.
Morse Micro held a Series C round in September 2025, raising US$88 million, followed in November 2025 by a US$32 million pre-IPO raise, taking total funding to over A$300 million.
It is targeting an ASX listing in the next 12–18 months. The Series C was led by Japanese chip giant MegaChips and the National Reconstruction Fund Corporation.
Global IoT device connections forecast to exceed 30 billion by 2030, and Morse Micro would be a rare ASX-listed pure-play semiconductor company, which could attract significant interest from tech-focused fund managers.
Morse Micro’s Revenue traction with tier-one hardware partners ahead of listing is a watch, and whether the company seeks a concurrent US listing given the depth of US semiconductor investor appetite.
5. Bison Resources
Bison Resources is a newly incorporated US-focused gold and precious metals explorer currently in the middle of its ASX IPO.
The offer closes on 20 March 2026, with an ASX listing targeted for mid-April 2026. At an indicative market capitalisation of A$13.25 million on full subscription, Bison is the most speculative name on this list by a significant margin.
The company holds four exploration projects in north-east Nevada, within the Carlin Trend (one of the world's most prolific gold-producing belts), responsible for approximately 75% of US gold output.
The IPO seeks to raise A$4.5 to A$5.5 million (22.5 to 27.5 million shares at A$0.20 per share). The team has prior experience at Sun Silver (ASX: SS1) and Black Bear Minerals, giving it a track record in ASX junior mining listings out of Nevada.
Global IPOs: What are the biggest IPOs happening globally in 2026?
Bottom line
Australia's 2026 IPO calendar spans the full risk spectrum. A Nvidia-backed AI infrastructure play, a billion-dollar e-commerce platform, and a junior gold explorer with its IPO already underway.
Each candidate reflects a different stage of maturity and a different investor profile. Together, they suggest the ASX could see a meaningful injection of new listings across sectors that have been largely absent from the local market in recent years.
Volatility doesn't discriminate. But it can punish the unprepared.
Stops getting hit on moves that reverse within minutes. Premiums on short-dated options climbing. And the yen no longer behaving as the reliable hedge it once was.
For traders across Asia, navigating this environment means asking harder questions about risk, timing, and the assumptions baked into strategies built for calmer markets.
1. How do I trade VIX CFDs during a geopolitical shock?
The CBOE Volatility Index (VIX) measures the market’s expectation of 30-day implied volatility on the S&P 500. It is often called the “fear gauge.” During geopolitical shocks such as the current Iran escalations, sanctions announcements, and surprise central bank actions, the VIX can spike sharply and quickly.
What makes VIX CFDs different in a shock
VIX itself is not directly tradeable. VIX CFDs are typically priced off VIX futures, which means they carry contango drag in normal conditions.
During a geopolitical shock, several things can happen at once
- Spot VIX may spike immediately while near-term futures lag, creating a disconnect.
- Spreads on VIX CFDs can widen significantly as liquidity thins.
- Margin requirements may change intraday as broker risk models adjust.
- VIX tends to mean-revert after spikes, so timing and duration are critical.
What this means for Asian-hours traders
Asian market hours mean many geopolitical events can break while local traders are active or just starting their session.
A shock that hits during Tokyo hours may already be priced into VIX futures before Sydney opens.
Some traders use VIX CFD positions as a short-term hedge against equity portfolios rather than a directional trade. Others trade the reversion (the move back toward historical averages once the initial spike fades). Both approaches carry distinct risks, and neither guarantees a specific outcome.
2. Why are my 0DTE options premiums so expensive right now?
Zero days-to-expiry (0DTE) options expire on the same day they are traded. They have become one of the fastest-growing segments of the options market, now representing more than 57% of daily S&P 500 options volume according to Cboe global markets data.
For Asian-based participants accessing US options markets, elevated premiums during volatile periods can feel like mispricing, but usually reflects structural pricing factors.
Why premiums spike
Options pricing is driven by intrinsic value and time value. For 0DTE options, there is almost no time value left, which might suggest they should be cheap but the implied volatility component compensates for that.
When uncertainty increases, sellers may demand greater compensation for the risk of sharp intraday moves.
This can be reflected in
- Higher implied volatility inputs.
- Wider bid-ask spreads.
- Faster adjustments in delta and gamma hedging.
In higher-VIX environments, hedging flows can contribute to short-term feedback loops in the underlying index. This can amplify price swings, particularly around key levels.
What this means for Asian-hours traders
Many 0DTE options contracts see their most active pricing and hedging flows during US trading hours. Entering positions during the Asian session may mean facing stale pricing or wider spreads.
If you are seeing expensive premiums, it may reflect the market accurately pricing the risk of a large same-day move. Whether that premium is worth paying depends on your view of the likely intraday range and your risk tolerance, not on the absolute dollar figure alone.
3. How do I adjust my algorithmic trading bot for a high-VIX environment?
Many algorithmic trading systems are built on parameters calibrated during lower-volatility regimes. When VIX spikes, those parameters can become outdated quickly.
The regime mismatch problem
Most trading algorithms use historical data to set position sizes, stop distances, and entry thresholds. That data reflects the conditions during which the system was tested. If VIX moves from 15 to 35, the statistical assumptions underpinning those settings may no longer hold.
Common failure modes in high-VIX environments include
- Stops triggered repeatedly by noise before the intended directional move occurs.
- Position sizing based on fixed-dollar risk, which becomes relatively small compared to actual intraday ranges.
- Correlation assumptions between assets breaking down.
- Slippage on execution that erodes edge.
Approaches some algorithmic traders consider
Rather than running a single fixed set of parameters, some systems incorporate a volatility regime filter. This is a real-time check on VIX or ATR that triggers a switch to different settings when conditions shift.
Approach adjustments that some traders review in high-VIX environments
- Widen stop distances proportionally to ATR to reduce noise-driven exits.
- Reduce position size to maintain constant dollar risk relative to wider expected ranges.
- Add a VIX threshold above which the system pauses or moves to paper trading mode.
- Reduce the number of simultaneous positions, as correlations tend to rise during market stress.
No adjustment eliminates risk. Backtesting new parameters on historical high-VIX periods can provide some indication of likely performance, though past conditions are not a reliable guide to future outcomes.
4. Is the Japanese Yen (JPY) still a reliable safe-haven trade?
During periods of global risk aversion, capital has historically flowed into JPY as investors unwind carry trades and seek lower-volatility holdings. However, the reliability of this dynamic has become more conditional.
Why has the yen historically moved as a safe haven?
Japan’s historically low interest rates made JPY the funding currency of choice for carry trades and when risk-off sentiment hits, those trades unwind quickly, creating demand for yen.
Additionally, Japan’s large net foreign asset position means Japanese investors tend to repatriate capital during crises, further supporting JPY.
What has changed
The Bank of Japan’s shift away from ultra-loose monetary policy in recent years has complicated the traditional safe-haven dynamic.
As Japanese interest rates rise:
- The scale of carry trade positioning may change.
- USD/JPY can become more sensitive to interest rate spreads.
- BoJ communication and domestic inflation data may influence JPY independently of global risk appetite.
The yen can still behave as a safe haven, particularly during sharp equity sell-offs. But it may respond more slowly or inconsistently compared to earlier cycles when the policy divergence between Japan and the rest of the world was more extreme.
What to watch
For traders monitoring JPY as a safe-haven signal, BoJ meeting dates, Japanese CPI releases, and real-time US-Japan rate spread data have become more relevant inputs than they were a few years ago.
5. How do I avoid ‘whipsawing’ on energy CFDs?
Whipsawing describes the experience of entering a trade in one direction, getting stopped out as the price reverses, then watching the price move back in the original direction.
Energy CFDs, particularly crude oil, are especially prone to this in volatile markets. And for traders in Asia, the combination of thin liquidity during local hours and sensitivity to geopolitical headlines can make this particularly challenging.
Why energy CFDs whipsaw
Crude oil is sensitive to a wide range of headline drivers: OPEC+ production decisions, US inventory data, geopolitical supply disruptions, and currency moves.
In high-volatility environments, the market can react strongly to each headline before reversing when the next one arrives.
- Price spikes on a headline, stops are triggered on short positions.
- Traders re-enter long, expecting continuation.
- A second headline or profit-taking reverses the move.
- Long stops are hit. The cycle repeats.
Approaches traders may consider to manage whipsaw risk
Some traders choose to change their risk controls in volatile conditions (for example, reviewing stop placement relative to volatility measures). However these may increase losses; execution and slippage risks can rise sharply in fast markets
Other approaches that some traders review:
- Avoid trading crude oil CFDs in the 30 minutes before and after major scheduled data releases.
- Use a longer timeframe chart to identify the prevailing trend before entering on a shorter timeframe, reducing the chance of trading against larger institutional flows.
- Scale into positions in stages rather than committing full size on initial entry.
- Monitor open interest and volume to distinguish between moves with genuine participation and low-liquidity fakeouts.
Whipsawing cannot be eliminated entirely in volatile energy markets. The goal of risk management in these conditions is not to predict which moves will hold, but to ensure that losses on false moves are smaller than gains when a genuine directional move follows.
Practical considerations for volatile Asian markets
Asian markets carry structural characteristics that interact with volatility differently from US or European markets:
- Thinner liquidity during local hours can exaggerate moves on thin volume, particularly in energy and FX CFDs.
- Events in China, including PMI releases, trade data, and PBOC policy signals, can move regional indices.
- BoJ policy decisions have become a more active driver of JPY and Nikkei volatility in recent years.
- Overnight gaps from US session moves are a persistent structural risk for traders unable to monitor positions around the clock.
- Margin requirements on leveraged products can change at short notice during high-VIX periods.
Frequently asked questions about volatility in Asian markets
What does a high VIX reading mean for Asian equity indices?
VIX measures expected volatility on the S&P 500, but elevated readings typically reflect global risk aversion that flows across markets. Asian indices such as the Nikkei 225, Hang Seng, and ASX 200 can often see increased volatility and negative correlation with sharp VIX spikes.
Can 0DTE options be traded during Asian hours?
Access depends on the platform and the specific instrument. US equity index 0DTE options are most actively priced during US trading hours. Asian traders may face wider spreads and less representative pricing outside those hours.
Are algorithmic trading strategies inherently riskier in high-volatility conditions?
Strategies calibrated during low-volatility periods may perform differently in high-VIX environments. Regular review of parameters against current market conditions is prudent for any systematic approach.
Has the JPY safe-haven trade changed permanently?
The Bank of Japan’s policy normalisation has introduced new dynamics, but JPY has continued to strengthen during some risk-off episodes. It may be more conditional on the nature of the shock and the BoJ’s concurrent posture.
What is the best way to set stops on energy CFDs in high-volatility conditions?
There is no universally best method. Many traders reference ATR to calibrate stop distances to prevailing conditions rather than using fixed levels. This does not guarantee exit at the desired price and does not eliminate whipsaw risk.
Volatility has a way of showing up uninvited.
One day the ASX is drifting quietly... and the next, margin requirements rise, stops do not fill where expected, and portfolios open with uncomfortable overnight gaps.
If you have been searching for answers, you are not alone. Some of the most searched questions about volatility among Australian traders relate to margin calls, slippage, overnight gaps, leveraged exchange traded funds (ETFs), and tools such as average true range (ATR).
Here is what is happening.
Why this matters now
Global markets have become more sensitive to interest rates, inflation data, geopolitics and technology-driven flows. When liquidity thins and uncertainty rises, price swings widen. That is volatility.
And volatility doesn’t just affect price direction, it changes how trades are executed, how much capital is required, and how risk behaves beneath the surface.
Translation: Volatility is not just about bigger moves, rather, it’s about faster moves and thinner liquidity - that’s when the mechanics of trading matter most.
Want a real-world volatility case study?
Why did my broker increase margin requirements?
One of the most searched questions about volatility is why margin requirements increase without warning.
When markets become unstable, brokers may increase margin requirements on contracts for difference (CFDs) and other leveraged products. Larger price swings can increase the risk of accounts moving into negative equity thus raising margin requirements reduces available leverage and can help manage exposure during extreme conditions.
What this can mean in practice
-A margin call may occur even if price has not moved significantly.
-Effective leverage can drop quickly.
-Positions may need to be reduced at short notice.
Margin adjustments are typically a response to changing market risk, not a random decision. In highly volatile markets, it is prudent to assume margin settings can change quickly, therefore many traders choose to review position sizes and available buffers in light of that risk.
What is slippage and why didn’t my stop fill at my price?
Another frequently searched topic is slippage.
Slippage can occur when a stop order triggers and is executed at the next available price, the outcome can depend on the order type, market liquidity and gaps. In calm markets, the difference may be small whereas in fast markets, prices can gap beyond the stop level.
Common drivers include
-Major economic or earnings releases.
-Thin liquidity.
-Crowded stop levels.
-Overnight sessions.
Stop-loss orders generally prioritise execution rather than price certainty and during periods of high volatility, this distinction becomes important. Adjusting position size and placing stops with reference to typical price movement may be more effective than simply tightening stops in unstable conditions.
How do I manage overnight gapping on the ASX?
Australia trades while the United States sleeps, and vice versa. This time zone difference is, sadly, one reason overnight gap risk is frequently searched by Australian traders. If US markets fall sharply, the ASX may open lower the following morning, with no opportunity to exit between the close and the open.
Examples of risk-management approaches market traders may use include
-Index hedging using ASX 200 futures or CFDs*.
-Partial hedging during high risk events.
-Reducing exposure ahead of major macro announcements.
Hedging can offset part of a move, but it introduces basis risk as individual stocks may not move in line with the broader index.
There is no perfect protection, only trade-offs between cost, complexity and risk reduction.
*CFDs are complex instruments and come with a high risk of losing money due to leverage.
What are the key risks of leveraged or inverse ETFs in volatile markets?
Leveraged and inverse ETFs are often searched during periods of heightened volatility.
While these products typically reset daily, they aim to deliver a multiple of the index’s daily return, not its long-term return. In a volatile, sideways market, daily compounding can erode value even if the index finishes near its starting level.
This occurs because gains and losses compound asymmetrically. A fall of 10 percent requires a gain of more than 10 percent to recover. When that effect is multiplied daily, outcomes can diverge materially from the underlying index over time.
Such instruments may be used tactically by some market participants. They are generally not designed as long-term hedging tools and understanding their structure is essential before using them in a strategy.
How can ATR be used to inform stop placement?
Average true range (ATR) is a commonly used indicator for measuring volatility.
ATR estimates how much an asset typically moves over a given period, including gaps. Rather than setting a stop at an arbitrary percentage, some traders reference ATR and place stops at a multiple, such as two or three times ATR, to reflect prevailing conditions.
When volatility rises, ATR expands and that can imply wider stops or smaller position sizes if overall risk is to remain constant. The shift is from asking, “How far am I willing to lose?” to asking, “What is a normal move in current conditions?"
Practical considerations in volatile markets
During periods of elevated volatility, traders may consider
- Allowing for the possibility of margin changes
- Sizing positions conservatively if volatility increases
- Recognising that stop-loss orders do not guarantee a specific exit price
- Reviewing exposure ahead of major economic events
- Understanding the daily reset mechanics of leveraged ETFs
- Using volatility measures such as ATR to inform stop placement
- Maintaining adequate cash buffers
Volatility does not reward prediction alone. Preparation and risk awareness may assist traders in understanding potential risks, but outcomes remain unpredictable.
Read: Global volatility and how to trade CFD
What this means for Australian traders
Australian markets face specific structural considerations cpmapred to Asian and US Markets. Overnight gap risk is influenced by US trading hours and resource heavy indices such as the ASX can respond quickly to commodity price movements and data from China. Currency exposure, including AUD and US dollar (USD) moves, can add another layer of variability.
Volatility is not uniform across regions. It behaves differently depending on market structure and liquidity depth.
Frequently asked questions about volatility
What causes sudden spikes in market volatility?
Interest rate decisions, inflation data, geopolitical developments, earnings surprises and liquidity constraints are common triggers.
Why do brokers increase margin during volatile markets?
To reduce leverage exposure and manage risk when price swings widen.
Can stop-loss orders fail during volatility?
They can experience slippage if markets gap beyond the stop level, meaning execution may occur at a worse price than expected. In fast or illiquid markets, this difference can be significant.
Are leveraged ETFs suitable for long term hedging?
They are generally structured for short-term exposure due to daily resets. Whether they are appropriate depends on your objectives, financial situation and risk tolerance.
How can volatility be measured before placing a trade?
Tools such as ATR, implied volatility indicators and historical range analysis can help quantify prevailing conditions.
Risk warning: Periods of heightened volatility can lead to rapid price movements, margin changes and execution at prices different from those expected. Risk-management tools such as stop-loss orders and volatility indicators may assist in assessing market conditions but cannot eliminate the risk of loss, particularly when using leveraged products.
Few institutions shape everyday Australian life as quietly, or as powerfully, as the Reserve Bank of Australia (RBA).
Every time you renew a mortgage, open a savings account, or watch the Australian dollar move, the RBA's decisions are somewhere in the background.
But what actually goes on inside the bank, and what drives the calls that ripple through the entire Australian economy?
Quick facts
- The RBA's cash rate is the single most-watched number in Australian finance.
- Rate decisions are made by a nine-member board, eight times per year.
- The RBA targets inflation of 2–3% on average over time.
- Australia's cash rate reached a 12-year high of 4.35% in November 2023.
What is the RBA?
The RBA is Australia’s central bank. Unlike commercial banks that lend to individuals and businesses, the RBA lends to financial institutions, issues the nation's currency, and acts as the government's banker.
It also plays a role in overseeing the stability of the broader financial system. It can step in during periods of economic stress to ensure credit keeps flowing.
What is central bank independence, and why does it matter?
For the average Australian, the RBA is most visible through its influence on interest rates. By setting a target for the cash rate, it shapes borrowing and saving costs across the economy.
This influence can filter through to mortgage rates, business lending, and the price of the Australian dollar.
How does the cash rate work?
The cash rate is the interest rate the RBA charges on overnight loans between banks. Banks constantly lend money to each other to manage their daily cash needs, and the RBA sets the floor on what those borrowing costs are.
When the RBA raises the cash rate, banks tend to pass that cost on to borrowers; when it cuts, interest on repayments tends to fall.
This knock-on effect is why the cash rate is such a powerful tool. Banks price their products off the cash rate, so a 0.25% RBA move typically flows through to variable mortgage rates within weeks.
Effects of RBA cash rate moves
A large share of Australian mortgages are on variable rates, so any change in the cash rate tends to pass through to household budgets faster than in countries where fixed-rate lending is more prominent.
How does the RBA make decisions?
The RBA board meets eight times per year to set monetary policy, with meeting dates published in advance.
The Board has nine members: the Governor, the Deputy Governor, the Secretary to the Treasury, and six external members appointed by the Treasurer for five-year terms. Decisions are made by consensus where possible, with the Governor holding a casting vote if needed.
These members make decisions with the intention of maintaining price stability and supporting full employment, with the economic prosperity and welfare of the Australian people as the overarching objective.
Price stability generally means keeping inflation within a 2–3% target band on average over time. The "on average over time" framing is deliberate; the RBA doesn't panic if inflation briefly strays outside the band, but sustained deviation in either direction can prompt the Board to consider a policy response.
Full employment is viewed in terms of the Non-Accelerating Inflation Rate of Unemployment (NAIRU), the lowest unemployment rate the economy can sustain without generating inflationary wage pressure. Estimates vary, but the RBA has historically placed this around 4–4.5%.
The tension between these two goals defines most RBA decisions. A strong labour market is good news for workers, but it can push wages (and therefore inflation) higher. On the other hand, cooling inflation often requires accepting some rise in unemployment.
In the lead-up to each meeting, RBA staff prepare extensive briefing materials covering every major economic indicator. The Board debates the evidence over two days before reaching a decision. The outcome is announced publicly at 2:30 pm AEDT on the meeting day, followed by a detailed statement and a press conference by the Governor.
Key inputs to each decision
The RBA's recent rate cycle
The current rate cycle is one of the most aggressive in the RBA's modern history. After holding the cash rate at a record low of 0.10% through the COVID pandemic, the RBA began hiking in May 2022 and raised rates thirteen times before pausing at 4.35% in November 2023.
A borrower with a $750,000 variable-rate mortgage saw their monthly repayments rise by roughly $1,500 to $1,800 between May 2022 and late 2023, a significant squeeze on household budgets that fed directly into the consumer slowdown the RBA was trying to engineer.
Throughout 2025, the RBA periodically dropped the rate back down, with it now sitting at 3.75% after a recent hike in February 2026.
What should traders watch?
Monthly CPI
Monthly CPI is generally considered the most important single data point for RBA watchers. If the data returns a “quarterly trimmed mean CPI” print above 3%, it can sharpen expectations of a hike or delay cuts (particularly if it surprises to the upside). The “trimmed mean” is the RBA's preferred measure as it tends to reduce data noise from volatility.
Labour force data
The labour force data includes numbers on the unemployment and underemployment rates, and wage growth. The RBA watches these numbers closely for any signs that wages may be rising at a pace inconsistent with the inflation target.
Governor's speeches and appearances
Between formal meetings, the Governor testifies before the House Economics Committee and delivers public speeches. These are closely scrutinised for sentiment signals of the board. Simple shifts in language, from "patient" to "vigilant", for example, can often be perceived as a change in tone that could influence the rate decision in upcoming meetings.
Neutral rate
The “neutral rate” is the cash rate range the RBA believes will neither speed the economy up nor slow it down. The current neutral cash rate is estimated at around 3.0–3.5%, which is below the actual rate of 3.75%, a sign that the RBA is still pumping the brakes on the economy. As the rate gets closer to the neutral zone, it can signal less urgency for the RBA to keep cutting. However, surprise data can always upend this assumption.
Global central banks
The RBA doesn't operate in isolation. If the US Federal Reserve holds rates higher for longer, it limits the RBA's room to cut without weakening the AUD and importing inflation through higher import prices.
Bottom line
The RBA's job is to keep the Australian economy on an even keel, and the cash rate is its main tool for doing so. Its decisions touch almost every corner of Australian financial life, from what you pay on your mortgage to how the Aussie dollar trades.
For traders, understanding how the RBA thinks and what it is watching goes a long way toward making sense of the broader Australian economic environment.