The market should witness a positive growth rate owing to the increasing adoption of algorithmic trading among end-users such as institutional investors, retail investors, short and long-term traders. North America region emerged as the largest market for the global algorithmic trading market, with a 31.08% market revenue share in 2022.
Newark, May 23, 2023 (GLOBE NEWSWIRE) -- The Brainy Insights estimates that the algorithmic trading market will grow from USD 12.92 billion in 2022 to USD 36.75 billion by 2032. The algorithmic trading market is witnessing a rise in demand amid the growing number of stock traders and increasing awareness regarding algorithmic platforms and tools. There are several functional benefits which the algorithmic trading solutions and service providers provide to the end-users product.
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Key Insight of the Algorithmic Trading Market
North America region to account for the largest market size during the forecast period.
North America is expected to have the most major algorithmic trading market share during the forecast period. The factors supporting the growth of the North American algorithmic trading market include the development of efficient and high-tech tools and platforms. Further, the increasing adoption of algorithmic trading software among end-users is promoting the growth of the algorithmic trading market.
The cloud segment is expected to augment the market during the forecast period.
The deployment mode segment is divided into cloud and on-premises. The cloud segment is expected to augment the market during the forecast period. The adoption of cloud-based algorithmic trading operates on minimum infrastructure and enables faster and more efficient processing. Financial institutions prefer using cloud-based solutions to minimize capital costs.
The services segment is expected to grow at the highest CAGR during the forecast period.
The component segment is divided into services and solutions. The services segment is further categorized into managed services and professional services. The solutions segment further consists of software and platforms. The services segment is expected to augment the market during the forecast period. Professional services are in high demand among end-users such as retail and institutional investors. Traders can formulate effective strategies using managed and professional services.
The cryptocurrencies segment is expected to grow at the highest CAGR during the forecast period.
The trading type segment is divided into stock markets, exchange-traded funds, foreign exchange, cryptocurrencies, bonds, and others. The cryptocurrencies segment is expected to grow at the highest CAGR during the forecast period. Cryptocurrencies are in high demand among short-term and long-term traders. The traders can track and process the current market data related to cryptocurrencies.
The retail investor segment is expected to grow at the highest CAGR during the forecast period.
The end-users segment is divided into short-term traders, long-term traders, retail investors and institutional investors. The retail investor segment is expected to augment the market during the forecast period. Retail investors can benefit from algorithmic trading software and services. It helps with systematic trading, faster and more efficient execution, and thorough market research.
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Market Dynamics
Driver: Enables fast transactions with utmost precision
Algorithms are created in advance so that one can follow the instructions appropriately and the transaction can be executed quickly. Various indications can be examined and used quickly at a hard-to-spot pace. This improves chances and enables faster analysis and execution of transactions. Generally speaking, traders with the quickest execution times are more successful than those with slower times. Algorithmic trading is distinguished from other trading styles by its high order-to-trade ratios and high turnover rates. Algorithmic trading is utterly dependent on how quickly institutions can execute their orders. Arbitrage tactics based on microsecond differentials might generate billions of dollars in profits because thousands of deals can be completed in a single second.
Restraint: Dependency on infrastructure
The lack of technology infrastructure can hinder the development of algorithmic trading. The consumer won't be able to benefit from algorithmic trading if their technological infrastructure is lacking or if they lose access to technology for any reason. Thus, a proper infrastructure setup is required for efficiently carrying out algorithmic trading.
Opportunity: Growing investments in the fintech industry
Over the past ten years, there has been an abundance of new financial technology companies which have changed the financial sector in countries worldwide. Fintechs frequently target particular market niches in insurance, wealth management, and credit. Their expansion is frequently fueled by risk-taking capital. Fintech investments have increased significantly during the past ten years in terms of volume and dollar worth of transactions. Investors have also spread across several nations, market sectors, and deal phases. Similar to other industries, newer fintech tends to have a lot of small deals, whereas older companies tend to have a lot fewer but larger deals. The growing number of investments has led to higher adoption of algorithmic trading among the end-users.
Challenges: Stringent regulations
Algorithmic trading must pass some stringent regulations on both global and regional levels. The regulatory organizations of a few nations still need to agree on whether algorithmic trading should be permitted. Therefore, there is always a potential that the regulatory body will enact additional algorithmic trading regulations or outright prohibit them.
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Some of the major players operating in the algorithmic trading market are:
• 63 Moons Technologies Limited
• Argo Software Engineering
• AlgoTrader
• InfoReach, Inc.
• MetaQuotes Ltd.
• Kuberre Systems, Inc.
• Refinitiv
• Tata Consultancy Services Limited
• Symphony
• Thomson Reuters
• VIRTU Finance Inc.
• Quant Core Capital Management
• uTrade
• Vela
Key Segments Cover in the Market:
By Deployment Mode:
• Cloud
• On-Premises
By Components:
• Services
o Managed Services
o Professional Services
• Solutions
o Software
o Platforms
By Trading Types:
• Stock Markets
• Exchange Traded Funds
• Foreign Exchange
• Cryptocurrencies
• Bonds
• Others
By End-users:
• Short-Term Traders
• Long-Term Traders
• Retail Investors
• Institutional Investors
By Region
• North America (U.S., Canada, Mexico)
• Europe (Germany, France, the U.K., Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America)
• The Middle East and Africa (UAE, South Africa, Rest of MEA)
About the report:
The market is analyzed based on value (USD Billion). All the segments have been analyzed global, regional, and country basis. The study includes the analysis of more than 30 countries for each part. The report analyzes driving factors, opportunities, restraints, and challenges to gain critical market insight. The study includes Porter's five forces model, attractiveness analysis, product analysis, supply, and demand analysis, competitor position grid analysis, distribution, and marketing channels analysis.
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