Algorithmic trading enables the automation of various trading processes such as generation of buy and sell orders and order execution based on predefined parameters and rules. It helps market participants minimize human errors and emotions involved in trading decisions. Algorithmic trading software platforms provide analysis of market data, identification of trading opportunities and automated execution. This takes the subjectivity out of the trading process and enables trading of large volumes quickly and cost-effectively. The global Algorithmic Trading Market caters to institutional investors and investment banks that demand trading of large volumes of securities within fractions of seconds. It enables quantitative analysis of petabytes of market data to predict price movements and identify arbitrage opportunities.
The global Algorithmic Trading Market is estimated to be valued at US$ 20 Billion in 2024 and is expected to exhibit a CAGR of 10% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends: Increased automation of trading processes through algorithmic trading has accelerated the growth of the market over the past few years. By automating various steps like generation of orders, execution and post trade analysis using predefined rules and algorithms, trading decisions can be made faster without human emotions. This enables execution of large volumes of trades within seconds which was not feasible manually. Automated trading also minimizes the risks and costs associated with manual errors. Growing volumes of digital data from various market and external sources provide opportunities to develop advanced algorithms leveraging technologies like machine learning and artificial intelligence to gain trading advantages. This has spurred innovations to develop more sophisticated algorithms with stronger predictive capabilities.
Segment Analysis
The algorithmic trading market is segmented based on trading type, component, deployment, and application. The solution segment held the largest market share in 2022 and is expected to remain dominant during the forecast period. Algorithmic trading solutions help organizations trade securities in a pre-programmed, automated manner without human intervention. They analyze market conditions and execute buy and sell orders to make profits or minimize losses based on algorithms and trading rules.
Key Takeaways
The global Algorithmic Trading market is expected to witness high growth over the forecast period of 2024 to 2031. The global Algorithmic Trading Market is estimated to be valued at US$ 20 Billion in 2024 and is expected to exhibit a CAGR of 10% over the forecast period 2024 to 2031.
Regional analysis: North America dominated the algorithmic trading market in 2022 and is expected to continue its dominance through 2031. The US accounted for the largest share due to the presence of major algorithmic trading companies and stock exchanges in the region. However, the Asia Pacific region is projected to grow at the fastest rate during the forecast period. Developing financial markets such as India and China are rapidly adopting algorithmic trading tools to benefit from real-time market analysis and trading opportunities.
Key players: Key players operating in the algorithmic trading market are Thomson Reuters, 63 moons, Virtu Financial, Software AG, MetaQuotes Software, Symphony Fintech, InfoReach, Argo SE, Kuberre Systems, and Vela Trading Systems. Thomson Reuters offers efficient algorithmic execution capabilities via Reuters Financial Services suite to investment banks and hedge funds to capture alpha while minimizing market impact. 63 moons provides a range of low-latency algorithmic trading capabilities focused on volatility trading, fixed-income trading, and dark pools trading through its Orion platform. Virtu Financial is one of the largest high-frequency traders globally, deploying advanced machine learning and predictive modeling techniques for ultra-low latency market making and order routing across asset classes.
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- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
