About Algorithmic Trading
Algorithmic trading or simply algo trading is the use of computer programs and software to execute trades based on predefined criteria and without any human intervention. It is the use of mathematical models to analyze each quote and trade in the stock market, identify liquidity opportunities, and turn the information into intelligent trading decisions. Algorithmic trading or computer-directed trading cut down transaction costs and permits investment managers to take control of their own trading processes. It is a method or style of trading and not a separate business. Algorithmic trading follows a defined set of instructions for placing the trade and to generate more profits at a speed that could impossible for the human trader.
Attributes | Details |
---|
Study Period | 2018-2030 |
Base Year | 2023 |
Unit | Value (USD Billion) |
CAGR | 9.9% |
Algorithmic Trading market is a fragmented market due to the presence of various players. The players are focusing on increasing their developing innovative and new services to improve quality. The companies are coming up with partnerships or agreements along with planning strategic activities such as partnerships, product launch, mergers, and acquisitions which will help them to sustain in the market and maintain their competitive edge. Analyst at AMA Research estimates that United States Players will contribute the maximum growth to Global Algorithmic Trading market throughout the forecasted period. Established and emerging Players should take a closer view at their existing organizations and reinvent traditional business and operating models to adapt to the future.
Citadel (United States), Optiver (Netherlands), Tower Research Capital (United States), Two Sigma Investments (United States), Virtu Financial (United States), KCG (United States), DRW Trading (United States), Flow Traders (Netherlands), Hudson River Trading (United States) and Jump Trading (United States) are some of the key players that are part of study coverage. Additionally, the Players which are also part of the research coverage are RSJ Algorithmic Trading (Prague), Spot Trading (India), Sun Trading (United States) and Tradebot Systems (United States).
Segmentation Overview
AMA Research has segmented the market of Global Algorithmic Trading market by and Region.
On the basis of geography, the market of Algorithmic Trading has been segmented into South America (Brazil, Argentina, Rest of South America), Asia Pacific (China, Japan, India, South Korea, Taiwan, Australia, Rest of Asia-Pacific), Europe (Germany, France, Italy, United Kingdom, Netherlands, Rest of Europe), MEA (Middle East, Africa), North America (United States, Canada, Mexico). North America region held largest market share in the year 2023. Europe, on the other hand, stood as the second largest market due to the presence of key companies in the region and high technological advancement. If we see Market by Component, the sub-segment i.e. Software (Cloud-based, On-premise, Hybrid) will boost the Algorithmic Trading market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth. If we see Market by Trading , the sub-segment i.e. Forex will boost the Algorithmic Trading market. Additionally, the rising demand from SMEs and various industry verticals gives enough cushion to market growth.
Influencing Trend:
Portfolio Risk Solutions, Early Adopters In Apac and Technological Advancements
Market Growth Drivers:
Rise In Integration Of Financial Market, Emergence Of AI And Algorithms In Financial Services Sector and Rapidly Growing Demand For Market Surveillance
Challenges:
Lack Of Awareness
Restraints:
Increasing Incidence of Systemic Risk
Opportunities:
Emerging Demand From Economies
Market Leaders and their expansionary development strategies
In June 2021, Gedik Investment has expanded its partnership with trading technology provider Horizon Software to deploy its platform for equities algorithmic execution, through the re-affirmed relationship, Horizon Software will provide Gedik Investment with both TWAP and POV trading strategies, allowing the team to time trades efficiently according to changes in price.
In January 2024, BestEx Research Group LLC, a pioneer in high-performance algorithmic trading solutions, proudly announces the launch of IS Zero. This innovative algorithm marks a significant advancement in the landscape of algorithmic trading, offering a more effective alternative to the long-standing volume-weighted average price (VWAP) algorithm for minimizing implementation shortfall (IS).
Europe, through the ESMA, establishes the framework which governs the actions and good practices of market participants, be they companies, institutions, individuals, systems, procedures or financial instruments. Each of the 27 countries of the union, through its home regulatory Agency, is responsible for promoting implementation and compliance monitoring.
Key Target Audience
Algorithmic Trading Manufacturers, Algorithmic Trading Distributors/Traders/Wholesalers, Algorithmic Trading Subcomponent Manufacturers, Industry Association and Downstream Vendors
About Approach
To evaluate and validate the market size various sources including primary and secondary analysis is utilized. AMA Research follows regulatory standards such as NAICS/SIC/ICB/TRCB, to have a better understanding of the market. The market study is conducted on basis of more than 200 companies dealing in the market regional as well as global areas with the purpose to understand the companies positioning regarding the market value, volume, and their market share for regional as well as global.
Further to bring relevance specific to any niche market we set and apply a number of criteria like Geographic Footprints, Regional Segments of Revenue, Operational Centres, etc. The next step is to finalize a team (In-House + Data Agencies) who then starts collecting C & D level executives and profiles, Industry experts, Opinion leaders, etc., and work towards appointment generation.
The primary research is performed by taking the interviews of executives of various companies dealing in the market as well as using the survey reports, research institute, and latest research reports. Meanwhile, the analyst team keeps preparing a set of questionnaires, and after getting the appointee list; the target audience is then tapped and segregated with various mediums and channels that are feasible for making connections that including email communication, telephonic, skype, LinkedIn Group & InMail, Community Forums, Community Forums, open Survey, SurveyMonkey, etc.