PUBLISHER: The Business Research Company | PRODUCT CODE: 1499992
PUBLISHER: The Business Research Company | PRODUCT CODE: 1499992
Algorithmic trading software automates the execution of trading strategies through predefined rules and algorithms. It enables traders to execute large orders at optimal prices and speeds by leveraging mathematical models and data analysis. This software facilitates rapid decision-making, reduces human error, and enhances trading efficiency in financial markets.
The primary components of algorithmic trading software comprise solutions and services. Algorithmic trading software solutions equip traders with tools and functionalities to develop, test, and execute their strategies. These products, including algorithmic trading software and platforms, can be deployed via cloud-based or on-premise setups. They find applications across various sectors such as investment banks, funds, personal investors, and more.
The algorithmic trading software market research report is one of a series of new reports from The Business Research Company that provides algorithmic trading software market statistics, including algorithmic trading software industry global market size, regional shares, competitors with an algorithmic trading software market share, detailed Algorithmic Trading Software market segments, market trends, and opportunities, and any further data you may need to thrive in the algorithmic trading software industry. This algorithmic trading software research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry
The algorithmic trading software market size has grown strongly in recent years. It will grow from $2.28 billion in 2023 to $2.50 billion in 2024 at a compound annual growth rate (CAGR) of 9.7%. The growth in the historic period can be attributed to regulatory changes, the growing complexity of financial markets, emphasis on cost efficiency and operational scalability, globalization of financial markets, increasing demand for alpha generation, and the outperformance of investment strategies.
The algorithmic trading software market size is expected to see rapid growth in the next few years. It will grow to $3.66 billion in 2028 at a compound annual growth rate (CAGR) of 10%. Looking ahead to the forecast period, growth is expected to be driven by the expansion of quantitative trading strategies and increased adoption of algorithmic trading, heightened focus on risk management and compliance requirements, growing demand for customization and flexibility, and a shift towards cloud-based solutions. Key trends anticipated in the forecast period include the integration of AI and ML technologies, expansion of quantitative trading strategies, adoption of cloud-based solutions, integration of alternative data sources into algorithmic trading software, the emergence of regulatory technology (RegTech) solutions tailored for algorithmic trading compliance, and a focus on enhancing user experience (UX) and interface design.
The increasing liquidity in the market is anticipated to drive the growth of the algorithmic trading software market in the future. Market liquidity refers to the ease with which assets can be bought or sold in a market without causing significant price fluctuations. The rise in market liquidity can be attributed to factors such as heightened trading activity, improvements in market infrastructure, enhanced transparency, and regulatory reforms aimed at promoting market efficiency and facilitating faster and more efficient order execution. Algorithmic trading software relies heavily on market liquidity to execute trades swiftly and effectively. Adequate market liquidity enables algorithmic traders to implement a variety of trading strategies, including market making, statistical arbitrage, trend following, and volatility trading. For example, as reported by the International Monetary Fund in August 2023, trading volume by institutional investors in crypto exchanges surged by over 1700% from around $25 billion to over $450 billion between the second quarters of 2020 and 2021. Consequently, the increasing liquidity in the market is a driving force behind the algorithmic trading software market.
Key players in the algorithmic trading software market are concentrating on developing next-generation algorithmic trading platforms. These platforms are advanced software systems designed to automate trading strategies in financial markets. For instance, in September 2022, Scotiabank, a multinational banking and financial services company based in Canada, collaborated with BestEx Research Group LLC, a US-based provider of algorithmic trading solutions, to launch a next-generation algorithmic trading platform. This platform is equipped with state-of-the-art technology tailored to meet the specific requirements of Canadian market participants. It aims to offer Scotiabank clients market-leading algorithmic execution quality and superior trading performance, leveraging research-driven logic to minimize costs for institutional investors. This cutting-edge platform, part of Scotiabank's electronic trading product suite called ScotiaRED, provides institutional investors with a seamless order execution experience across the Americas, incorporating research-driven logic to reduce costs and deliver optimal trading performance for clients.
In March 2022, Trading Technologies International Inc., a US-based company specializing in trading platform development, acquired RCM-X for an undisclosed sum. Through this acquisition, Trading Technologies (TT) aims to enhance its platform by integrating RCM-X's new product suite, comprising algorithmic execution strategies, trade analytics, and transaction cost analysis (TCA) services, tailored for institutional clients. RCM-X is a US-based technology company specializing in the development of algorithmic execution strategies and quantitative trading products customized for institutional clients.
Major companies operating in the algorithmic trading software market are AlgoTrader AG, Interactive Brokers LLC, Virtu Financial, Flow Traders Ltd., DRW Holdings LLC, TradeStation Group Inc., Tower Research Capital LLC, Hudson River Trading LLC, Jump Trading LLC, FlexTrade Systems Inc., NinjaTrader Group LLC, Trading Technologies International Inc., MetaQuotes Software Corp., Teza Technologies, RSJ Group, Quantlab Financial LLC, Tradebot Systems Inc, Tethys Technology Inc., IQBroker LLC, QuantRocket, Sierra Chart, QuantConnect Corporation, StockSharp, Wealth-Lab, Python Quants GmbH
North America was the largest region in the algorithmic trading software market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the algorithmic trading software market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
The countries covered in the algorithmic trading software market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The algorithmic trading software market consists of revenues earned by entities providing services such as the development, licensing, and maintenance of software solutions designed to automate the execution of trading strategies based on predefined algorithms and rulesets. The market value includes the value of related goods sold by the service provider or included within the service offering. The algorithmic trading software market also includes sales of trading platforms, APIs (application programming interfaces), trading algorithms, market data feeds, and related hardware infrastructure utilized in the development and implementation of algorithmic trading strategies. Values in this market are 'factory gate' values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Algorithmic Trading Software Global Market Report 2024 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on algorithmic trading software market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for algorithmic trading software ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The algorithmic trading software market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The impact of sanctions, supply chain disruptions, and altered demand for goods and services due to the Russian Ukraine war, impacting various macro-economic factors and parameters in the Eastern European region and its subsequent effect on global markets.
The impact of higher inflation in many countries and the resulting spike in interest rates.
The continued but declining impact of COVID-19 on supply chains and consumption patterns.