IMARC Group’s latest report, titled “Algorithmic Trading Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027,” finds that the global algorithmic trading market reached US$ 13.0 Billion in 2021. Algorithmic trading, also known as automated trading, relies on a computer program that follows a pre-defined set of instructions based on price, timing, quantity, or any mathematical model to execute a trade. It allows investors to control the trading process through a computer and generates profits at a speed and frequency that is practically impossible for a human trader. It uses advanced mathematical tools to facilitate transactions in the financial sector and makes the market more liquid and systematic by eliminating the influence of human emotions on trading activities. As a result, algorithmic trading is gaining immense traction across the globe to generate higher profits, reduce transactional costs, and place orders instantaneously.
Global Algorithmic Trading Market Trends:
There has been widespread adoption of algorithmic trading across small and medium-sized enterprises (SMEs) to improve efficiency and profit generation. This, along with extensive investments in trading technologies, represents the primary factor driving the market growth. Moreover, there is a rise in product usage in high-frequency trading (HFT), which involves placing large trade orders across multiple markets and enabling prompt decision-making. Along with this, the growing need for quick, reliable, and efficient order execution and lowering transaction costs has augmented the demand for algorithmic trading. Additionally, the emergence of artificial intelligence (AI), machine learning (ML), and big data in the financial services sector have led to a rise in data-driven investments. In line with this, the increasing applications of algorithmic trading in order execution, arbitrage, and trend trading strategies are positively influencing market growth. Furthermore, the leading players are offering cloud-based trading options to automate the trading process, lower operational costs, and provide transactional flexibility to clients. Besides this, the rising establishment of risk management platforms to offer market surveillance monitoring and identify fraudulent activities in the automated trading system has propelled market growth. Other factors, including the integration of application programming interface (API) with algorithmic trading, the advent of cloud computing, supportive government policies, and technological advancements, are also creating a favorable market outlook. Looking forward, IMARC Group expects the market value to reach US$ 24.0 Billion by 2027, expanding at a CAGR of 11.4% during 2022-2027.
- On the basis of the trading type, the market has been categorized into foreign exchange (FOREX), stock markets, exchange-traded fund (ETF), bonds, cryptocurrencies, and others.
- Based on the component, the market has been divided into solutions (platforms and software tools) and services (professional and managed services).
- The market has been bifurcated based on the deployment model into on-premises and cloud.
- Based on the organization size, the market has been classified as small and medium, and large enterprises.
- Region-wise, the market has been segmented into North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.
- The competitive landscape of the market has also been analyzed, with some of the key players being Vela Trading Systems LLC, Meta-Quotes Limited, Trading Technologies International Inc., Software AG, AlgoTrader, uTrade Solutions Private Limited, Automated Trading SoftTech Private Limited, Kuberre Systems Inc., InfoReach Inc., Virtu Financial Inc., Tata Consultancy Services, Argo Group International Holdings Limited, Thomson Reuters Corporation, iRageCapital Advisory Private Limited, and 63 Moons Technologies Ltd.
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