Algorithmic Trading Market – Growth, Trends, COVID-19 Impact, and Forecasts (2022 – 2029)

Algorithmic Trading Market was valued at US$ 12.89 Bn. in 2021 and is expected to reach US$ 28.86 Bn. by 2029, at a CAGR of 10.6% during a forecast period.
Algorithmic Trading Market Overview:
The systematic process of executing automatic pre-programmed trading instructions while analyzing variables such as volume, price, and time is known as algorithmic trading. It uses powerful mathematical techniques to aid in the decision-making process in the financial sector. It is utilized to provide traders an advantage over traditional human traders in terms of data processing speed. Algorithmic trading uses complex computations, mathematical models, and human oversight to make decisions about whether to buy or sell financial instruments on an exchange. Algorithmic traders commonly use high-frequency trading equipment, which allows a corporation to make tens of thousands of trades per second.



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COVID-19 Impact Analysis:
The COVID-19 pandemic has no impact on the algorithmic trading market's growth, as the adoption of algorithmic trading solutions has risen in the face of unprecedented circumstances. Because of the rising movement toward algorithmic trading for making judgments at a very rapid pace while decreasing human errors, the COVID-19 pandemic has considerably boosted the growth rate of the algorithmic trading market. In a recent paper, the Reserve Bank of Australia indicated that the COVID-19 outbreak may have simply accelerated the industry's shift toward electronic trading. Furthermore, during the pandemic, market participants created innovative algorithmic trading products to better serve the higher trade volumes. This aspect is what propels the market forward. Cowen, an American international independent investment bank and financial services corporation, for example, launched an algorithmic trading solution in March 2021 to assist institutional clients in navigating market fluctuations created by rising retail trading volumes.
Algorithmic Trading Market Dynamics:
The global Algorithmic Trading Market is primarily driven by factors such as technological advancements, which have resulted in an increase in demand for cloud-based solutions, consequently adding to the market's growth. Growing awareness and adoption of algorithmic trading around the world is providing new opportunities for important players in the global Algorithmic Trading Market. Furthermore, huge brokerage firms and institutional investors are increasingly turning to algorithmic trading to reduce trading expenses. As a result, algorithmic trading allows for smoother and faster order execution, making it appealing to exchanges, which will drive the Algorithmic Trading Market forward over the forecast period.

Furthermore, the rise of the Algorithmic Trading Market is expected to be aided by the emergence of AI in the financial services sector. During the forecast period, the market will be fueled by the advent of stringent government regulations and the growing requirement for market surveillance. However, the market's growth is being stifled by a lack of risk valuation capabilities and observation.

Top Impacting Factor:

The surge in need for reliable, rapid, and effective order execution; the advent of favorable government rules; and the necessity for market surveillance are all driving forces in the global algorithmic trading industry. Furthermore, the need for algorithmic trading is being fueled by growth in the desire for lower transaction costs. Inadequate risk valuation capabilities, on the other hand, may limit market growth to some extent. During the forecast period, however, the advent of AI and algorithms in financial services is expected to give the profitable potential for market growth.
Algorithmic Trading Market segment analysis:
Based on component, the market is divided into two categories: solutions and services. In the Algorithmic Trading Market, the solution category accounted largest market share of xx% in 2021. Reduced transaction costs due to the lack of human participation, as well as rapid and precise trade order placement, contributed to the market's rise. In addition, market participants are providing innovative algorithmic trading solutions to meet their customers' different needs. However, due to the widespread acceptance of professional services among end-users, which guarantees the successful and seamless operation of algorithmic trading solutions, the services category is likely to develop significantly during the forecast period.

Based on trading type, Foreign Exchange (FOREX), Stock Markets, Exchange-Traded Funds (ETF), Bonds, Cryptocurrencies, and other financial instruments make up the market. The exchange-traded fund segment is expected to increase significantly throughout the forecast period, owing to the fact that it offers traders low average cost, allowing them to maximize earnings from ETFs.
Algorithmic Trading Market Regional Insight:
The North America region held the largest market share of xx% in 2021. The primary factors driving market growth throughout the forecast period include increased investments in trading technologies (such as blockchain), the growing presence of algorithmic trading suppliers, and growing government backing for global trading. Furthermore, market growth is likely to be stimulated by significant technology advancements and widespread deployment of algorithm trading in various applications such as banks and financial institutions across the area.

Algorithmic trading accounts for 60-73 % of all stock trading in the United States. According to Select USA, the financial markets in the United States are the world's largest and most liquid. Sentient Technologies, a hedge fund run by an AI startup based in the United States, developed an algorithm that analyses millions of data points to uncover trading patterns and forecast trends. Sentient's algorithms analyses trillions of simulated trading scenarios to find and combine successful trading patterns and develop new techniques. Not only does this save time and effort, but it also ensures the highest level of accuracy.

Recent Developments:

• Investment Technology Group, a global financial technology company that helps top brokers and asset managers increase returns for customers around the world, was acquired by Virtu Financial in March 2021. For Virtu Financial's broker-neutral client offerings, the acquisition would adopt a Client Information Security Program (CISP).

• Algo Trader announced the release of AlgoTrader 6.0 in March 2021. AlgoTrader 6.0 now provides crypto exchange adapters for Deribit, Huobi, Kraken, and Bithumb, in addition to the previous crypto adapters. For all market data adapters, AlgoTrader 6.0 provides full support for Level II Order Book data. The new AlgoTrader UI Order Book widget displays all available BUY and SELL orders at each price level to the user.

The objective of the report is to present a comprehensive analysis of the Algorithmic Trading market to the stakeholders in the industry. The past and current status of the industry with the forecasted market size and trends are presented in the report with the analysis of complicated data in simple language. The report covers all the aspects of the industry with a dedicated study of key players that include market leaders, followers, and new entrants.

PORTER, PESTEL analysis with the potential impact of micro-economic factors of the market have been presented in the report. External as well as internal factors that are supposed to affect the business positively or negatively have been analyzed, which will give a clear futuristic view of the industry to the decision-makers.

The report also helps in understanding the Algorithmic Trading market dynamics, structure by analyzing the market segments and projects the Algorithmic Trading market size. Clear representation of competitive analysis of key players by product, price, financial position, product portfolio, growth strategies, and regional presence in the Algorithmic Trading market make the report investor’s guide.
Algorithmic Trading Market Scope: Inquire before buying
Global Algorithmic Trading Market, by Component
• Solutions
o Platforms
o Software Tools
• Services
o Professional Services
o Managed Services
Global Algorithmic Trading Market, by Trading Type
• Foreign Exchange (FOREX)
• Stock Markets
• Exchange-Traded Fund (ETF)
• Bonds
• Cryptocurrencies
• Others
Algorithmic Trading Market, by Region
• North America
• Europe
• Asia Pacific
• Middle East and Africa
• South America
Algorithmic Trading Market Key Players
• Algo Trader GmbH
• Trading Technologies
• Info Reach
• Tethys Technology
• Lime Brokerage LLC
• Flex Trade Systems
• Tower Research Capital
• Virtu Financial
• Hudson River Trading
• Citadel
• Technologies International
• Argo Software Engineering
• Automated Trading Soft Tech
• Kuberre Systems
• Meta Quotes Software Corp.
• Software AG
• Thomson Reuters Corporation
• u Trade
• Vela Trading Systems LLC

Frequently Asked Questions:

1. Which region has the largest share in Algorithmic Trading Market?
Ans: North America region holds the highest share in 2021.

2. What is the growth rate of Algorithmic Trading Market?
Ans: The Algorithmic Trading Market is growing at a CAGR of 10.6 % during forecasting period 2022-2029.

3. What segments are covered in Algorithmic Trading market?
Ans: Algorithmic Trading Market is segmented into component, trending type and region.

4. Who are the key players in Algorithmic Trading market?
Ans: The important key players in the Algorithmic Trading Market are – AlgoTrader GmbH, Trading Technologies International, Inc., InfoReach, Inc., Tethys Technology, Inc., Lime Brokerage LLC, FlexTrade Systems, Inc., Tower Research Capital LLC, Virtu Financial, Hudson River Trading LLC, Citadel LLC, Technologies International, Inc., Argo Software Engineering, Inc., Automated Trading SoftTech Pvt. Ltd.

5. What is the study period of this market?
Ans: The Algorithmic Trading Market is studied from 202 to 2029.