Global Algorithmic Trading Market Size, Share, and COVID-19 Impact Analysis, By Component (Solution, Services), By Deployment (On-premise, Cloud-based), By Type (Stock Markets, FOREX, Exchange-Traded Fund (ETF), Bonds, Cryptocurrencies & Others), and by Region (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa) Analysis and Forecast 2023-2032.

KEY MARKET INSIGHTS

The Algorithmic Trading Market size was worth around USD 14.69 billion in 2022 and is predicted to grow around USD 49.32 billion by 2032, with a compound annual growth rate of roughly 13.01% between 2023 and 2032. Algorithmic trading, often known as "algo-trading," is the process of managing a trading activity using computer programs with a pre-defined set of instructions. The instructions are based on a mathematical model's pricing, timing, quantity, and many other aspects. It promises to make money, lower transaction costs, and provide investors computer-based control over the trading process. Aside from this, by removing all human effects, algorithmic trading makes the market more flexible and systematic. High-frequency trading (HFT), which includes putting sizable trade orders across several marketplaces, also makes quick decisions possible.

COVID-19 ANALYSIS

The COVID-19 epidemic has had a favorable effect on the growing rate of the market. Algorithmic trading allows for more quick decision-making while minimizing human errors. The Covid-19 outbreak, for instance, may have merely accelerated the industry's shift toward computerized trading, according to a recent paper by the Reserve Bank of Australia. Additionally, the pandemic has increased the appeal of high-frequency traders (HFT), which has fueled market expansion. As an illustration, Virtu Financial, one of the top high-speed traders, recorded net trading revenue of $784.5 million for the first quarter of 2020.

TREND

Increasing API-driven Trading in Developing Regions

The increasing adoption of API-based trading offers faster order execution and investors may execute trades based on insights and analytics while keeping customers in the analytics app and fostering greater customer loyalty. The API-based trading platform enhances digital wealth management solutions to connect with capital markets in order to offer rea-time trading and market data.

DRIVERS

Increasing Implementation of Cloud-based Services

The market for algorithmic trading will see significant potential due to the rising adoption of cloud-based services, cloud computing, and cloud-based trading solutions. When placing trades, traders employ cloud services for back testing, run-time series analysis, and trading techniques. To improve efficiency, enhanced security, better data management, improved sustainability, etc.

Introduction of ML, AI and Other Technologies to Improve Efficiency

The financial services industry's adoption of AI, ML, and big data is anticipated to play a significant role in the market growth for algorithmic trading. Because of the advancements in technology, regulators are also beginning to pay attention to the ways that people engage with the market. Some of the biggest institutions in the world began implementing such technologies to advance algorithmic trading.

RESTRAINT

Concerns Pertaining to Inadequate Risks Valuation

Lack of observation and weak risk valuation skills could limit market growth during the forecasted timeframe. Moreover, the life span of algorithms is short which may hamper the market growth. The skilled professional is required to operate the platforms.

SEGMENTATION INSIGHT

The global algorithmic trading market is segmented by Component (Solution, Services), by Deployment (On-premise and Cloud-based), by Type (Stock Markets, FOREX, Exchange-Traded Fund (ETF), Bonds, Cryptocurrencies and Others) and Region. Based on the component, the market is categorized solution, services. Based on deployment, the market is categorized into on-premise, cloud-based. Based on type, the market is categorized into stock markets, forex, exchange-traded fund (ETF), bonds, cryptocurrencies and others. Based on the region, the market is categorized into North America, Europe, Asia-Pacific, South America, Middle East and Africa.

Component Insights

Based on the component segment, the global algorithmic trading market is categorized into solution, services. The solution segment has dominated the market share in 2020 of global algorithmic trading market owing to advantages of algorithmic trading solutions, such as lower transaction costs owing to the absence of human intervention and quick and precise trade order placement, are what primarily fuel the demand for these solutions. In addition, market participants are providing sophisticated algorithmic trading systems to meet a range of customer needs.

Deployment Insights

Based on the deployment segment, the global algorithmic trading market is categorized into on-premise, cloud-based. The cloud-based segment has dominated the market share in 2020 of global algorithmic trading market owing to because financial firms are increasingly using cloud-based solutions to boost productivity and efficiency. Additionally, cloud-based algorithmic trading solutions are becoming more and more popular among traders since they guarantee efficient process automation, data preservation, and cost-effective management.

REGIONAL INSIGHTS

The global algorithmic trading market is categorized into North America, Europe, Asia-Pacific, Latin America, Middle East and Africa. North America region is dominating the market share of global algorithmic trading market owing to a variety of variables, such as significant expenditures in trading technology and rising government backing for international trade. Additionally, the region's dense concentration of vendors offering algorithmic trading contributes to the market's expansion. However, Asia Pacific region is anticipated to grow over the next few years of global algorithmic trading market owing to significant public and private sector investments in advancing their trading technologies, which are fueling demand for algorithmic trading solutions to automate trading procedures, Asia-Pacific is predicted to experience the fastest growth rate throughout the projected period.

LIST OF KEY COMPANIES PROFILED:

• 63 moons technologies limited
• AlgoTrader
• Argo Software Engineering
• Citadel LLC
• FlexTrade Systems, Inc.
• Hudson River Trading
• InfoReach, Inc.
• Lime Trading Corp.
• MetaQuotes Ltd
• Refinitiv Limited
• Software AG
• Symphony
• Tata Consultancy Services Limited
• Tethys Technology, Inc.
• Tower Research Capital LLC
• Trading Technologies International, Inc.
• Virtu Financial
• Others

KEY INDUSTRY DEVELOPMENTS: 

• June 2022- AlgoTrader has introduced a latest version 6.4 of Broker Desk solution which will enable traders to offer crypto & digital asset trading to the customers.
• Alexbank has announced to adopt Electronic Trading solution (ET) provided by Refinitiv to empower their business in Egypt and strengthen its presence in both the local and international Foreign Exchange (FX) markets.
• Trading Technologies International has made a strategic move by getting partnership with Talos Enter to expand into multiple asset classes, including cryptocurrencies, and provides a significant opportunity for TT’s global customer base to access Talos’ extensive, market-leading cryptocurrency trading solutions.
• May 2022- Virtu Financial has collaborated with Arqaam Capital to expand the customer base associated with the equity execution algorithms across Middle-Eastern and North Africa (MENA) markets.
• Argo Software Engineering announced a new release of Argo Trading Platform which will enhance the scalability improvements and performance.
• FlexTrade has collaborated with Cürex Group to integrate Cürex’s CipherSM FX analytics platform on the FlexTRADER EMS.

· August 2021- Tethys Technology integrates MSCI index data with tethysalgo trade execution algorithms that will enable clients to achieve superior trading performance for their funds.

SEGMENTATION INSIGHT

By Component

• Solution
• Services

By Deployment

• On-premise
• Cloud-based

By Type

• Stock Markets
• FOREX
• Exchange-Traded Fund (ETF)
• Bonds
• Cryptocurrencies
• Others

By Region

• North America- U.S., Mexico, Canada
• Europe- UK, France, Germany, Italy, Spain, Rest of Europe
• Asia-Pacific- China, Japan, India, South Korea, Rest of Asia Pacific
• South America- Brazil, Argentina, Colombia, Rest of South America
• The Middle East and Africa- GCC, South Africa, Rest of Middle East & Africa