Burlingame, Aug. 23, 2023 (GLOBE NEWSWIRE) -- The global algorithmic trading market was valued at $10,346.6 Mn in 2018 and is expected to exhibit a CAGR of 10.7% over the forecast period to reach $25,257.0 million in 2027, according to a new study conducted by Coherent Market Insights, Inc. Algorithmic trading is a technique of executing orders using pre-programmed computer algorithms that automatically complete trading strategies based on a set of predefined criteria. This approach has gained popularity in the financial markets due to its ability to execute trades at high speeds and frequencies, minimizing human error and improving efficiency.
Key Industry Insights & Findings from the report:
In September 2022, CoinShares launches HAL, the algorithmic trading platform for crypto traders. HAL simplifies crypto trading by offering all exchanges users access to trading algorithms designed by CoinShares’ quants.
In January 2021, Citi has launched a new suite of intelligent execution algorithms for global listed derivatives. These algorithms have been specifically engineered for the futures markets and are available across all major exchanges in the North America, Europe and Asia Pacific regions.
Global algorithmic trading market is expected to exhibit a CAGR of 10.7% during the forecast period, owing to the growing adoption of cloud-based solution along with the increasing disposable income of consumers.
On the basis of Function, risk management segment is expected to hold a dominant position, owing to the Algorithms monitor price movements in order to reduce the risk involved in trading.
On the basis of Application, equities segment is expected to hold a dominant position, owing to the fact that it is widely used in stock markets, including various strategies to capitalize on price movements and market inefficiencies.
On the basis of region, North America is expected to hold a dominant position over the forecast period. The U.S. is a key market for algorithmic trading, with a mature financial industry and well-known technology hubs. Major financial centers such as New York and Chicago augment algorithmic trading market growth.
Read full market research report, "Algorithmic Trading Market Report, by Function (Programming, Debugging, Data Extraction, Back-Testing & Optimization, and Risk Management), by Application, and by Region, Size, Share, Outlook, and Opportunity Analysis, 2019 - 2027", published by Coherent Market Insights.
Key Trends and Analysis of the Global Algorithmic Trading Market:
Increasing adoption of cloud-based solution is a growing trend. For instance, according to cloud computing stats, the global public cloud computing market is set to exceed $330 billion in 2022. Moreover, experts say 60% of workloads are running on a hosted cloud service in 2019. four out of five companies use IaaS, and almost two-thirds (61%) use PaaS
Market Drivers:
Increasing demand for AI-based services in the financial sector to propel market growth
AI-based services are gaining adoption in financial industry in order to improve the customer experience. Use of AI in financial sector can also reduce the risk of fraud. According to Forbes, 70% of financial firms are using machine learning to predict cash flow events, adjust credit scores and detect fraud. Thus, increasing adoption of AI in financial sector is expected to drive market growth
Growing disposable income of consumer to augment market growth
Rising disposable income has led to an increased trading activity. This is augmenting the market growth. According to India Brand Equity Foundation (IBEF), in 2018, India’s total rural income was around US$ 572 billion and is projected to reach US$ 1.8 trillion by the year 2021. India's rural per capita disposable income is estimated to increase at a CAGR of 4.4% to US$ 631 by 2020.
Market Opportunities:
Increasing number of partnership among key players in market is expected to serve major growth opportunities
In order to expand their presence in the market key players are adopting various growth strategies such as partnership and agreements. For instance, in June 2021, Gedik Investment has expanded its partnership with trading technology provider Horizon Software to deploy its platform for equities algorithmic execution. Through the re-affirmed relationship, Horizon Software will provide Gedik Investment with both TWAP and POV trading strategies.
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