Algorithmic Trading Market Size

Algorithmic Trading Market Size & Industry Analysis, 2027

Global Algorithmic Trading Market By Component (Solution and Services), By Traders Type (Institutional Investors, Long-Term Traders, Short-Term Traders and Others), By Deployment Type (Cloud and On-premise), By Type (Stock Markets, FOREX, ETF, Bonds, Cryptocurrencies and Others), By Regional Outlook, COVID-19 Impact Analysis Report and Forecast, 2021 - 2027

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Published Date : July-2021 | Number of Pages : 256 | Format : PDF

COVID-19

Get in-depth analysis of the COVID-19 impact on the Algorithmic Trading Market

Market Report Description

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.

Algorithmic Trading Market Size - Global Opportunities and Trends Analysis Report 2021-2027

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.

COVID-19 Impact Analysis

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.

Component Outlook

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.

Algorithmic Trading Market Share and Industry Analysis Report 2021-2027

Traders Type Outlook

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.

Deployment Type Outlook

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.

Type Outlook

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.

Algorithmic Trading Market Report Coverage
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
  • Growing demand for rapid, reliable, and efficient order execution
  • The advent of AI & algorithms in the financial services
Restraints
  • The problem of over-optimization

Regional Outlook

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.

KBV Cardinal Matrix - Algorithmic Trading Market Competition Analysis

Algorithmic Trading Market - Competitive Landscape and Trends by Forecast 2027

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.

Recent Strategies Deployed in Algorithmic Trading Market

» Partnerships, Collaborations, and Agreements:

  • May-2021: Trading Technologies came into partnership with CloudQuant (CQ), a premier vendor of alternative data (AltData), artificial intelligence, and data integration technologies. Under this partnership, the former company engaged the latter company for advising on the development of the latest data business unit and exploring the delivery of data advisory services & AltData via the TT platform to TT’s global customer base.
  • Mar-2021: Symphony joined hands with AccessFintech, a provider of risk management service for banks and buy-side firms, and tracks the trade lifecycle. In this collaboration, Symphony’s collaboration & communication platform would integrate with AccessFintech’s data management & workflow network solution to accelerate the resolution of discrepancies like mismatches and trade fails in the post-trade environment.
  • Oct-2020: Trading Technologies signed an agreement with Applied Derivatives Pty. Ltd., a leading securities trading and brokerage firm. In this agreement, Applied Derivatives became the first broker to distribute the TT platform from South Africa. In addition, Applied Derivatives is also offering international customers’ access to the Johannesburg Stock Exchange (JSE) for the trading of all equity & currency derivatives that include futures and options, listed on the JSE Derivatives Market.
  • Oct-2020: Trading Technologies came into an agreement with Xinhu Futures, an international provider of futures brokerage, investment consulting, and asset management services. This agreement aimed to offer access to the Chinese international derivatives markets via the TT platform.
  • Jul-2020: Trading Technologies entered into a multi-year agreement with the Institutional Services division (IS) of TP ICAP, the world’s largest interdealer broker. This agreement focused on replacing 85 trading screens in Paris, London, and New York with TT’s TT Pro trading screen, and TT ICAP would use TT’s latest Order Management System (OMS) solution.

» Product Launches and Product Expansions:

  • Jun-2021: Vela introduced the new updates on their automated trading platform, Metro. The addition of two latest algos to the Metro Store Front: a Realized Futures Volatility Calculator and the latest Underlying Offset Controller application developed for oil & index options trading. Moreover, there are some latest features added to the prevailing Store Front algos. Now, The Dynamic Skew App supports Delta as a Point Type, and the Volatility Levels provides performance statistics of individual trades and monitor volatility metrics for butterfly spreads.
  • Dec-2020: Vela introduced execution services for US Equities and Equity Options. These latest execution capabilities are accessible on Vela’s low-latency DMA Platform and also its automated trading & market-making front-end, Metro. Market access is provided via ED&F Man Capital Markets; Chicago-based GalNet Asset Management is the foremost customer live on Metro with order routing through ED&F Man Capital Markets.
  • Jul-2020: Tata Consultancy Services unveiled a cryptocurrency trading platform called Quartz Smart Solution for banks and investments. This platform supports various cryptocurrencies, digital coins connected to fiat currencies, digital assets, trading channels, and public blockchain networks, thus providing a choice and flexibility to users in their trading & investment strategies.

Scope of the Study

Market Segments Covered in the Report:

By Component

  • Solution
  • Services

By Traders Type

  • Institutional Investors
  • Long-Term Traders
  • Short-Term Traders
  • Others

By Deployment Type

  • Cloud
  • On-premise

By Type

  • Stock Markets
  • FOREX
  • ETF
  • Bonds
  • Cryptocurrencies
  • Others

By Geography

  • North America
    • US
    • Canada
    • Mexico
    • Rest of North America
  • Europe
    • Germany
    • UK
    • France
    • Russia
    • Spain
    • Italy
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Singapore
    • Malaysia
    • Rest of Asia Pacific
  • LAMEA
    • Brazil
    • Argentina
    • UAE
    • Saudi Arabia
    • South Africa
    • Nigeria
    • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

  • 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
  • Tethys Technology, Inc.

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Related Reports:

North America Algorithmic Trading Market Report 2021-2027

Europe Algorithmic Trading Market Report 2021-2027

Asia Pacific Algorithmic Trading Market Report 2021-2027

LAMEA Algorithmic Trading Market Report 2021-2027

FREQUENTLY ASKED QUESTIONS (FAQ):

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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