The Global Algorithmic Trading Market size is expected to reach $26.7 billion by 2027, rising at a market growth of 11.7% CAGR during the forecast period. Algorithmic trading is also called as automated trading. It is a form of automation that uses computer programs to accomplish a defined set of rules and instructions that comprises the buying or selling of an asset with respect to the varying market data. These defined sets of rules and instructions are mainly based on quantity, price, timing, or any mathematical model.
It provides numerous benefits to market participants like it executes trades at the best likely prices; trades timed correctly, simultaneous automated checks on multiple market conditions; and minimal transaction costs owing to low amount of human intervention. The algorithm trading market is experiencing a considerable growth rate due to the growing automation process in trading by numerous firms. Integrated financial markets are helpful for the local vendors in buying foreign assets that have reduced risks. The involvement of different international algorithm trading markets is focused on the global distribution of savings. It is helping the countries in developing more opportunities for risk-sharing and portfolio diversification.
Some of the catalysts for the growth of the global algorithmic trading market include favorable government regulations, rising demand for reliable, fast, and efficient order execution, rising demand for market surveillance, and reducing transaction costs. Big brokerage houses and institutional investors use algorithmic trading to minimize the costs related to bulk trading. Moreover, the appearance of AI in the financial service sector is likely to be a key factor in the growth of the algorithmic trading market. Regulators are also noting the ways through which individuals interact with the market owing to the constant developments in the AI.
The outbreak of the global COVID-19 pandemic has affected each sector of society. The adoption of algorithmic trading solutions has surged due to the pandemic situation. This pandemic has substantially propelled the growth rate of the algorithmic trading market because there is a shifting preference of the companies towards Algo trading for making the decisions quickly by minimizing human errors. For example, the Reserve Bank of Australia, in its publication said that the Covid-19 pandemic has accelerated the industrial shift toward electronic trading.
Based on Component, the market is segmented into Solution and Services. The key market players are launching improved algorithmic trading solutions to deliver the different needs of their customers. For example, BNP Paribas, in September 2019, launched the latest FX trading platform featuring real-time analytics & interactive algorithms. Though, the services segment is projected to acquire the highest growth, owing to the huge adoption of professional services by the end-users, since it facilitates efficient functioning of algorithmic trading solutions across the process.
Based on Traders Type, the market is segmented into Institutional Investors, Long-Term Traders, Short-Term Traders and Others. Institutional investors are insurance companies, hedge funds, banks, credit unions, investment advisors, and mutual funds companies. It helps in increasing money to purchase securities, real estate, or any other types of investment assets. Institutional investors daily exploit numerous computer-driven algorithmic strategies in the constantly changing trading markets.
Based on Deployment Type, the market is segmented into Cloud and On-premise. On the basis of deployment mode, the cloud segment dominated the global algorithmic trading market in 2020. It is also estimated to continue this trend during the forecast period owing to the rising adoption of cloud-based applications by financial institutions to improve their productivity & efficiency.
Based on Type, the market is segmented into Stock Markets, FOREX, ETF, Bonds, Cryptocurrencies and Others. On the basis of type, the stock markets segment acquired the highest growth in the algorithmic trading market in 2020 and is estimated to continue its dominance during the forecast period. It is owing to the deployment of algorithmic trading solutions by investors to carry out trade stocks since it runs by a computer program without a requirement for human interference.
| Report Attribute | Details |
|---|---|
| Market size value in 2020 | USD 11.8 Billion |
| Market size forecast in 2027 | USD 26.7 Billion |
| Base Year | 2020 |
| Historical Period | 2017 to 2019 |
| Forecast Period | 2021 to 2027 |
| Revenue Growth Rate | CAGR of 11.7% from 2021 to 2027 |
| Number of Pages | 256 |
| Number of Tables | 370 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Companies Strategic Developments, Company Profiling, Competitive Landscape |
| Segments covered | Component, Traders Type, Deployment Type, Type, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. Asia Pacific is anticipated to register the highest growth rate over the forecast period. This growth is attributed to the high investments by public & private sectors to improve their trading technologies, and thus, propelling the demand for algorithmic trading solutions to automate trading procedures. Moreover, the quick expansion of algorithmic trading market players would open new growth avenues for the growth of the market.
Free Valuable Insights: Global Algorithmic Trading Market size to reach USD 26.7 Billion by 2027
The major strategies followed by the market participants are Product Launches. Based on the Analysis presented in the Cardinal matrix; Tata Consultancy Services Ltd. is the major forerunner in the Algorithmic Trading Market. Companies such as Vela Trading Systems LLC, Trading Technologies International, Inc., and Thomson Reuters Corporation are some of the key innovators in the market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Software AG, Tata Consultancy Services Ltd., Thomson Reuters Corporation (The Woodbridge Company), Argo SE, Inc., MetaQuotes Ltd., Symphony Fintech Solutions Private Limited, Kuberre Systems, Inc., Trading Technologies International, Inc., Vela Trading Systems LLC, and Tethys Technology, Inc.
By Component
By Traders Type
By Deployment Type
By Type
By Geography
The Algorithmic Trading market size is projected to reach USD 26.7 billion by 2027.
Growing demand for rapid, reliable, and efficient order execution are driving the market in coming years, however, The problem of over-optimization have limited the growth of the market.
Software AG, Tata Consultancy Services Ltd., Thomson Reuters Corporation (The Woodbridge Company), Argo SE, Inc., MetaQuotes Ltd., Symphony Fintech Solutions Private Limited, Kuberre Systems, Inc., Trading Technologies International, Inc., Vela Trading Systems LLC, and Tethys Technology, Inc.
The expected CAGR of the Algorithmic Trading market is 11.7% from 2021 to 2027.
This pandemic has substantially propelled the growth rate of the algorithmic trading market because there is a shifting preference of the companies towards Algo trading for making the decisions quickly by minimizing human errors.
The Stock Markets market dominated the Global Algorithmic Trading Market by Type 2020. The FOREX market is expected to witness a CAGR of 11.4% during (2021 - 2027).
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