Global Algorithmic Trading Market Grows at a Staggering CAGR of 12.73%

Introduction

Algorithmic trading is called black-box trading, automated trading, or Algo-trading. It is a method that uses a computer program that follows a defined set of instructions or an algorithm to administer the trading activity. An algorithm is fed into a computer program to perform the trade whenever the command is met automatically. An algorithm can be based on input pointers such as price, quantity, timing, or other metrics. It offers several benefits to market participants, such as it executes trades at the best possible prices, simultaneous automated checks on multiple market conditions, trades timed correctly and instantly, and reduced transaction costs due to lack of human intervention.

Market Dynamics

Increasing Need for Market Surveillance and the Implementation of Favorable Government Regulations Drives the Global Market

Global government bodies are learning ways to control algorithms and implementing regulations to safeguard algorithmic trading. The regulatory Authority (FINRA) requires algorithmic trading developers to register as securities traders to reduce market manipulation. National regulations govern trade surveillance to prevent insider trading, market manipulation, unauthorized disclosure, and attempted manipulation. High frequent occurrences have given rise to worries about the integrity and stability of the market. Increasing market surveillance demands algorithmic trading systems with surveillance capabilities, propelling the market growth.

Artificial Intelligence and Machine Learning in Financial Services Creates Tremendous Opportunities

Financial services organizations use machine learning and artificial intelligence to profit from digital data. Data-driven investment has gained popularity in recent years. Trading algorithms driven by AI can examine vast amounts of data far faster than humans. AI and algorithms in financial services are helpful for market growth during the forecast period because they enable algorithmic trading innovation.

Regional Analysis

North America's largest market share is expected to grow at a CAGR of 10.22% during the forecast period. The United States and Canada make up the North American market. North America is expected to take the lead in adopting and developing algorithmic trading solutions due to its sizable market and competitive sector.

Europe is anticipated to proliferate at a CAGR of 13.85%, generating USD 12,871.63 million during the forecast period. The European market is analyzed across Germany, the UK, France, Italy, and others. The algorithmic trading business is driven by technical innovation, regulatory reforms, and greater participant competitiveness in the trading market, which has led to an increase in the use of novel infrastructures and trading methodologies in the field. Also, the government is adopting special laws and regulations to promote algorithmic trading security and performance, which fosters market growth.

The algorithmic trading market in Asia-Pacific is analyzed in China, Japan, India, Australia, and the rest of Asia-Pacific. The Asia-Pacific algorithmic trading market will grow due to the deployment of 5G networks, network infrastructure, and connectivity.

Key Highlights

• The global algorithmic trading market was valued at USD 35,701 million in 2021. It is expected to reach USD 1,04,971.2 million by 2030, growing at a CAGR of 12.73% during the forecast period (2022–2030).
• Based on the component, the global algorithmic trading market is divided into solutions and services. The solution segment dominates the global algorithmic trading market and is expected to grow at a CAGR of 12.03% during the forecast period.
• Based on the type, the global algorithmic trading market is divided into stock markets, FOREX, Exchange Traded Fund (ETF), bonds, cryptocurrencies, and others. The Exchange Traded Fund is predicted to hold the highest market share and is expected to grow at a CAGR of 15.55% during the forecast period.
• Based on deployment mode, the global algorithmic trading market is divided into on-premise and cloud. The cloud segment is anticipated to maintain the highest market share and grow at a CAGR of 14.04% during the forecast period.
• Based on the type of traders, the global algorithmic trading market is divided into institutional investors, long-term traders, short-term traders, and retail investors. Retail investors are predicted to hold the highest market share and grow at a CAGR of 13.84% during the forecast period.
• North America's largest market share is expected to grow at a CAGR of 10.22% during the forecast period.

Competitive Players

Competitive Players

The global algorithmic trading market’s major key players are 63MOONS, Virtu Financial, Software AG, Refinitiv Ltd., MetaQuotes Software Corp., Symphony Fintech Solutions Pvt Ltd., Argo SE, Tata Consultancy Services, Algo Trader AG, and Tethys.

Recent Developments

Market News

• In May 2022, Virtu Financial, Inc., a global market maker, broker, and provider of financial services technology, launched RFQ-hub Holdings LLC to expand RFQ-hub, its bilateral multi-asset and multi-dealer request for quote platform.
• In June 2022, MetaQuotes attended iFX EXPO International 2022 in Limassol, Cyprus. This financial expo has brought together Europe, Asia, and the Middle East for ten years.
• In June 2022, TCS won the 2022 FTF News technology awards for Quartz for markets. The solution covers end-to-end tokenized securities services for Market Infrastructure Institutions (MIIs), exchanges, depositories, central banks, payment infrastructures, private banks, custodians, and issuers – to fuel their future development.

Segmentation

Global Algorithmic Trading Market: Segmentation

By Component

• Solution
• Services

By Type

• Stock Markets
• Forex
• ETF
• Bonds
• Cryptocurrencies
• Others

By Deployment Mode

• On-Premise
• Cloud

By Type of Traders

• Institutional Investors
• Long-term Investors
• Short-term Investors
• Retail Investors

By Regions

• North America
• Europe
• Asia-Pacific
• LAMEA