According to the latest report by IMARC Group, titled “Algorithmic Trading Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2020-2025,” the global algorithmic trading market size reached US$ 11 Billion in 2019. Algorithmic trading refers to the process of utilizing computer programs with a defined set of automated instructions to execute and administer a trading activity. Also known as algo-trading, the algorithm employs instructions that are usually based on the quantity, price, timing and volume. Widely comprising trading signal, pre-trade analysis, trade execution and post-trade analysis, these processes are used to make decisions regarding purchasing or selling financial securities on an exchange with numerous complex formulas, aided by human oversight and mathematical models. It is employed to generate profits, minimize transactional costs and enable investors to control the trading process. It is also utilized for processing various trades in a limited time, as well as stimulating prompt decision making by several institutional investors and brokerage firms.
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Global Algorithmic Trading Market Trends:
The global market is primarily driven by the growing adoption of algo trading by small and large enterprises since their utilization is widely associated with increased efficiency and profit generation. Numerous key players are continually engaging in the development of algo-trading processes equipped with advanced technologies. They are utilizing cloud computing, data sciences and application programming interface (API) trading to optimize data management strategies, which, in turn, is expected to provide a boost to the market growth. The incorporation of artificial intelligence (AI) with algo-trading is also creating a positive outlook for the market as it aids in creating lucrative trading opportunities through portfolio diversification and the global distribution of savings and risk sharing. The market is further driven by the growing demand for market surveillance on the global level. It is pertinent to track trading activities and investment portfolio of traders while monitoring and detecting fraudulent activities in the automated trading system. Algorithm trading plays a crucial role in such cases and therefore is increasingly utilized in trade research and operations. On account of the aforementioned factors, the market is anticipated to exhibit strong growth during 2020-2025.
- On the basis of the trading type, the market has been divided into foreign exchange (FOREX), stock markets, exchange-traded fund (ETF), bonds, cryptocurrencies, and others. Among these, stock markets represent the largest market segment.
- The market has been bifurcated on the basis of the component into solutions and services (professional and managed services). Currently, solutions are the most popular component that is further divided into platforms and software tools.
- Based on the deployment model, the on-premise model exhibits a clear dominance in the market, followed by cloud.
- On the basis of the organization size, the market has been classified into small and medium enterprises, and large enterprises. At present, large enterprises account for the majority of the total market share.
- On the geographical front, North America holds the leading position in the market. Some of the other major regions include Europe, Asia Pacific, Latin America, and Middle East and Africa.
- The competitive landscape of the market has been examined in the report with the detailed profiles of the key players. Some of these players include Vela Trading Systems LLC, MetaQuotes Software Corp., Trading Technologies International, Inc., SAG Deutschland GmbH, AlgoTrader AG, uTrade Solutions Pvt Ltd, Automated Trading Softtech Pvt. Ltd, Kuberre Systems, Inc., InfoReach, Inc., Virtu Financial, Tata Consultancy Services Limited, Argo Group International Holdings, Ltd., Thomson Reuters Holdings Inc., iRageCapital Advisory Pvt Ltd, and 63 moons Technologies Limited.
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