Algorithmic Trading Market Size Growing At CAGR Of 7.2% Growth And Future Projections


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Algorithmic Trading Market

The global algorithmic trading industry's growth is fueled by the demand for efficient order execution, supportive regulations, and market surveillance needs.

PORTLAND, OR, UNITED STATES, October 4, 2024 /EINPresswire / -- According to the report, the global algorithmic trading market size was valued at $17.0 billion in 2023, and is estimated to reach $65.2 billion by 2032, growing at a CAGR of 15.9% from 2024 to 2032.

The growth of the global algorithmic trading industry is mainly driven by factors such as rise in demand for reliable, fast, and effective order execution; the emergence of favorable government regulations; and the need for market surveillance primarily. In addition, rise in demand for reducing transaction costs fuels the demand for algorithmic trading. However, insufficient risk valuation capabilities may hamper market growth to some extent.

On the other hand, the emergence of AI and algorithms in financial services is expected to provide lucrative opportunities for market growth during the forecast period. In addition, rise in demand for cloud-based solutions is anticipated to be opportunistic for algorithmic trading market growth during the forecast period.

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By type of trader, the institutional investors segment held the highest market share in 2023, accounting for two-fifths of the global algorithmic trading market revenue and is expected to retain its dominance throughout the forecast period. Algorithmic trading has become a basis for institutional investors, offering efficiency, speed, and precision in executing trades across diverse markets. However, the retail investors segment is projected to manifest the highest CAGR from 2024 to 2032. Retail investors can benefit from algorithmic trading by leveraging the speed and efficiency of automated systems to execute trades more quickly and accurately than manual trading.

By deployment mode, the on-premises segment held the highest market share in 2023 and is expected to retain its dominance throughout the forecast period, due to increase in adoption of cloud-based applications by financial institutions to enhance their productivity and efficiency. However, the cloud segment is expected to witness the highest growth during the forecast period. Cloud-based algorithmic trading solutions are gaining popularity among the traders as they ensure the effective automation of processes and data maintenance along with cost-friendly management.

By type, the stocks market segment held the highest market share in 2023 and is expected to retain its dominance throughout the forecast period. Algorithmic trading has revolutionized the financial markets by increasing liquidity, reducing trading costs, and enabling sophisticated trading strategies to be executed automatically. However, the cryptocurrency segment is projected to manifest the highest CAGR from 2024 to 2032. Crypto algorithmic trading can encompass various strategies, including trend following, arbitrage, and market making. It offers advantages such as high-speed execution, the ability to capitalize on market inefficiencies, and the elimination of emotional bias from trading decisions.

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By component, the solution segment held the highest market share in 2023 and is expected to retain its dominance throughout the forecast period. The demand for algorithmic trading solutions is mainly driven by its benefits such as reduced transaction costs due to lack of human intervention and instant and accurate trade order placement. However, the service segment is projected to manifest the highest growth from 2024 to 2032, due to the extensive adoption of professional services among end users, as it ensures the effective functioning of algorithmic trading solutions throughout the process.

Recent Industry Developments

1. In March 2021, Cowen, an American multinational independent investment bank and financial services company launched an algorithmic trading solution to help institutional clients navigate market dynamics caused by increased volumes of retail trading.

2. In September 2022, CoinShares, Europe's largest and longest-standing full-service digital asset investment and trading group, launched HAL, a leading crypto-assets trading strategies platform. HAL aims to simplify and democratize crypto trading, which many investors consider complex. It is designed to enable more users to boost their trading with professional algorithms, a simple user experience, fair and transparent pricing, and educational content.

Major Industry Players: -

Software AG
Metaquotes Software Corp
Argo SE
Tata Consultancy Services
Symphony Fintech Solutions Pvt Ltd.
63moons
Algo Trader AG
Virtu Financial
Tethys

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The report provides a detailed analysis of these key players in the global algorithmic trading market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.

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