Finance Industry Today

Algorithmic Trading Market Expected to Reach $31,494 million by 2028: A Look into its Trends, Competitive Landscape and Market Dynamics

The rapid expansion of global algorithmic trading market players creates lucrative growth opportunities for the market growth.
Published 12 June 2024

According to the report published by Allied Market Research, the global algorithmic trading market was accounted for $12,143 million in 2020, and is projected to reach $31,494 million by 2028, registering a CAGR of 12.7% from 2021 to 2028. The study analyzes the key strategies, drivers, competition, market dynamics, size, and important investment regions. 

Key Takeaways of the Study: 

  • The rise in demand for fast, reliable, and effective order execution tools among investors is expected to boost the industry’s growth.  
  • The increasing adoption of AI in financial services is predicted to create wide growth opportunities for the market over the forecast period.  
  •  The advancements in high-frequency trading are anticipated to enhance the performance of algorithmic trading systems.  

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Recent Trends in the Industry:  

  • High-Frequency Trading (HFT) Enhancements: HFT strategies involve executing many trades at high speeds. Recent developments have focused on further reducing latency and improving execution speeds. Edge computing reduces latency and improves the performance of HFT systems. 
  • Artificial Intelligence and Machine Learning: AI and machine learning are transforming algorithmic trading significantly. These technologies enable algorithms to learn from historical data and improve their predictions and trading decisions over time. 
  • Advanced Data Analytics: The availability of big data and improvements in data analytics have enhanced the capabilities of algorithmic trading. Traders are increasingly using non-traditional data sources, such as satellite images, weather forecasts, and social media activity, to gain insights into market trends. 

Top Factors Influencing the Market’s Growth: 

  • Rising Demand for Fast, Reliable, and Effective Order Execution: Algorithmic trading enables easier and faster execution of orders, making it attractive and suitable for exchanges. In addition, it enables the investors and traders to quickly generate profit out of small price changes. 
  • Emergence of AI in the Financial Services: Most financial services companies are adopting AI and machine learning to capitalize on data from digitally driven channels. This has increased the demand for high-frequency trading or algorithmic trading to analyze massive amounts of data much quicker than humans do.  
  • Increasing Need for Market Surveillance: Trade surveillance includes capturing trade data and then analyzing and monitoring them to detect potential market abuse and other forms of financial crime such as rogue trading. This has increased the need for algorithmic trading solutions for market stability and integrity.  

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Segmental Orientation: 

The global algorithmic market is classified into various segments based on component, type, deployment mode, and type of traders. Based on component, the solution segment is predicted to hold the highest share due to the increase in demand for algorithmic trading solutions because of their numerous benefits such as reduced transaction costs. By deployment mode, the cloud segment is expected to dominate the industry, driven by the adoption of cloud-based applications by financial institutions to enhance their productivity and efficiency. Based on type, the stock markets segment held the highest market share, attributed to the speed, efficacy, data-driven decision-making, and risk-management skills of algorithm trading software. By types of traders, the retail investors segment is anticipated to garner the largest share because they trade for others in large quantities, requiring algorithmic trading software more often.   

Regional Growth Analysis: 

The industry is also analyzed across several regions such as North America, Europe, Asia-Pacific, and LAMEA.  The North America region is expected to dominate the industry share during the forecast period. This is mainly due to the increase in government support for global trading and huge investments in trading technologies by leading players in the region. However, the market across Asia-Pacific is predicted to manifest the highest CAGR over the estimated period, driven by the huge investments by public and private sectors across the region to improve their trading technologies.  

Competitive Landscape: 

  • ALGO TRADER AG 
  • TATA CONSULTANCY SERVICES 
  • METAQUOTES SOFTWARE CORP. 
  • ARGO SE 
  • SYMPHONY FINTECH SOLUTIONS PVT LTD., 
  • SOFTWARE AG 
  • TETHYS 
  • VIRTU FINANCIAL 
  • REFINITIV LTD. 
  • 63MOONS 

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Key Questions Answered in the Intelligent Study 

  • What are the key technological and market trends shaping the market? 
  • Which company accounted for the highest market share? 
  • What factors are estimated to drive and restrain the industry’s growth? 
  • What is the market size and growth rate of the landscape for selective countries? 
  • What are the emerging opportunities in the industry? 

What Sets Allied Market Research Apart? 

  • Exclusive Product Offerings 
  • Future Market Opportunities 
  • Value Chain Analysis 
  • Post-sales Support 
  • Customer Research Services 
  • Latest Technological Advancements 
  • Quality Assurance 

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About Us: 

Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients in making strategic business decisions and achieving sustainable growth in their respective market domains. 

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies. This helps us dig out market data that helps us generate accurate research data tables and confirm utmost accuracy in our market forecasting. Every data company in the domain is concerned. Our secondary data procurement methodology includes deep presented in the reports published by us is extracted through primary interviews with top officials from leading online and offline research and discussion with knowledgeable professionals and analysts in the industry. 

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