The global Algorithmic Trading Market is estimated to be valued at US$ 2.03 billion in 2022 and is expected to exhibit a CAGR of 7.2% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Algorithmic trading utilizes advanced mathematical models and computer algorithms to automate trading decisions and order placement. It allows trading to occur at much higher speeds and in larger volumes than traditional human traders. The key advantage is reduced risk of human errors and ability to leverage very small price movements across multiple markets.
Market key trends:
One of the major trends in the algorithmic trading market is the increasing adoption of machine learning and artificial intelligence. Machine learning algorithms are able to analyze vast amounts of market and trading data to identify patterns and predict future price movements. This helps traders build predictive models and develop more sophisticated trading strategies. For example, deep learning techniques such as convolutional neural networks are being applied to interpret images, text and audio to extract insights from alternative data sources for trading decisions.
The global algorithmic trading market is segmented into solutions such as software and service. Among these, the software segment dominated the market in 2022 and accounted for around 62% share of the total market. The software segment is dominating as it forms the core of algorithmic trading activities and includes various software tools and platforms that help traders design, test, and deploy automated trading strategies.
Global Algorithmic Trading Market Size is expected to witness high growth, exhibiting a CAGR of 7.2% over the forecast period 2023-2030, due to increasing demand for predictive analytics and rise in high-frequency and algorithm-based trading.
Regional analysis: North America dominated the global market in 2022 and accounted for around 41% share. The region is expected to continue its dominance during the forecast period as well, owing to presence of major financial hubs and technological advancements in the region. Asia Pacific is expected to be the fastest growing region, exhibiting a CAGR of over 9%, due to growing retail participation in stock markets and increasing efforts by the governments in developing countries to promote financial technology.
Key players: Key players operating in the algorithmic trading market are AlgoTrader GmbH, Trading Technologies International, Inc., Tethys Technology, Inc., Tower Research Capital LLC, Lime Brokerage LLC, InfoReach, Inc., FlexTrade Systems, Inc., Hudson River Trading LLC, Citadel LLC, and Virtu Financial. Trading Technologies International and FlexTrade Systems collectively accounted for over 25% share of the global market in 2022.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it