Algorithm Trading Market Sees an Advantage

  • The Global Algorithm Trading Market is expected to register a CAGR of 12.5% during the forecast period.
  • A lack of visibility and standard benchmarks associated with algorithm trading could hinder growth.
  • Professional services are expected to dominate the market during the forecast period.

According to MRFR analysis, the Global Algorithm Trading Market was valued at $9.2 billion in 2018; it is expected to reach $20.0 billion, registering a CAGR of 12.5% during the forecast period. Market growth can be attributed to the surging demand for market surveillance software solutions, rising adoption of cloud-based algorithm trading solutions, and utilization of automated trading software by financial firms.

However, a lack of visibility and standard benchmarks associated with algorithm trading, and requirements for high technical expertise are some of the factors likely to hinder the growth of the global Algorithm Trading Market during the forecast period.

Key Developments

In May 2019, Trading Technologies International, Inc. a provider of high-performance professional trading software, launched CoinFLEX, a physically delivered bitcoin futures exchange, for professional and retail traders outside the US through the TT trading platform. CoinFLEX is available for commercial hedgers, including mining firms, over-the-counter (OTC) trading desk, and global proprietary trading firms.

The Global Algorithm Trading Market is expected to register a CAGR of 12.5% during the forecast period.

In March 2018, Long Blockchain Corporation acquired Hashcove, a UK-based technology company, to strengthen its presence in the international markets. Through this acquisition, Long Blockchain Corporation is able to strengthen its product portfolio by offering smart contracts for initial coin offerings (ICO),crypto-exchanges and wallets, tokenized platforms, and other related blockchain applications.

In January 2017, Symphony partnered with Finvasia, a provider of broker offering zero brokerage and zero clearing trading account in India to launch Blitz, a next-generation algorithmic trading platform. Blitz allows proprietary traders, institutional investors, and professional traders to build, test, and deploy simple to complex trading strategies in a cost effective manner.

Segments

The global Algorithm Trading Market has been segmented based on component, trading type, organization size, deployment mode, and region

By component, the global Algorithm Trading Market has been divided into solutions and services. The solution segment has been segmented into software tools and platform. The services segment has been categorized as professional services and managed services. Professional services accounted for a larger market share in 2018, and are expected to dominate the market during the forecast period. This is due to the surge in need for customized solutions and services to implement algorithmic trading solutions effectively.

However, the managed services segment is likely to exhibit higher CAGR during 2019–2024. The market growth is attributed to the rising inclination of financial investors to emphasize core tasks that propel the demand for managed services during the forecast period.

Based on trading type, the global Algorithm Trading Market has been categorized as foreign exchange, stock markets, exchange-traded funds, bonds, and crypto-currencies. The stock market segment accounted for the largest market share in 2018 due to rising adoption of cloud-based solutions and favorable government regulations allowing cloud-based solutions in the stock markets.

Professional services are expected to dominate the market during the forecast period.

Based on deployment mode, the Algorithm Trading Market Report has been segmented into cloud and on-premises. The cloud segment accounted for the larger market size in 2018 and is expected to  exhibit the higher CAGR. Market growth for the cloud-based segment is attributed to the increasing need for affordable, highly accessible, and scalable trading solutions.

By organization size, the Algorithm Trading Market Report has been segmented into large enterprise and small and medium enterprise. The large enterprise segment accounted for the larger market size in 2018 due to high-end infrastructure and financial budgets on maintaining algorithm trading platforms.

Key Players

The key players in the global Algorithm Trading Market Report are ALGOTRADES – Automated Algorithmic Trading System (US), iRageCapital (India), Software AG (Germany), QuantCore Capital Management (China), Tethys (US), Thomson Reuters (US), MetaQuotes Software (Cyprus), Trading Technologies (US), uTrade (India), Tata Consulting Services (India),  63 moons (India), InfoReach (US), Kuberre Systems (US), Argo SE (US), Vela (US), Virtu Financial (US), Symphony Fintech (India), and Automated Trading SoftTech (India).

Regional Analysis

By region, the global Algorithm Trading Market Report has been segmented into North America, Europe, Asia-Pacific, the Middle East and Africa, and South America. North America accounted for the largest market in 2018, due to the availability of high technical expertise in the US and Canada and early adoption of AI and ML and their integration with algorithm trading. Asia-Pacific is expected to be the fastest-growing market for algorithm trading over the next few years. Market growth is due to the rapid adoption of algorithm trading solutions among professional traders to maximize the profits of various trading strategies, regardless of stock market conditions.

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