Algorithmic Trading Market Analysis | CMI

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• Coherent Market Insights
• Market Research and Business Consulting Services
• https//www.coherentmarketinsights.com/
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ALGORITHMIC TRADING MARKET ANALYSIS

• Algorithmic Trading Market Report, by Function
  (Programming, Debugging, Data Extraction,
  Back-Testing Optimization, and Risk
  Management), by Application (Equities, Forex,
  Commodities, Funds, Others (Insurance, etc.)),
  and by Region (North America, Europe, Asia
  Pacific, Latin America, Middle East, and Africa)
  - Size, Share, Outlook, and Opportunity Analysis,
  2019 - 2027
• Global algorithmic trading market was valued at
  US 10,346.6 Mn in 2018 and is expected to
  exhibit a CAGR of 10.7 over the forecast period
  to reach US 25,257.0 Mn in 2027.

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Market Drivers

• The global algorithmic trading market is expected
  to witness significant growth during the forecast
  period (2019-2027). This is attributed to
  increasing adoption of cloud-based solutions,
  services, and cloud computing for algorithmic
  trading. Traders use cloud services for
  backtesting, trading strategies, and run-time
  series analysis with executing trade. Traders
  choose cloud computing as it is capital intensive
  to build ones own data centers for services such
  as data storage, backup and recovery, data
  management and trading networks. Therefore, it is
  easier to rent space over cloud rather than
  developing software or hardware infrastructure.
  According to Coherent Market Insights, the cloud
  computing market is expected to grow from US 58
  billion in 2013 to US 191 billion by 2020, and
  the professional cloud services market is
  expected to grow from US 15.36 billion in 2017,
  to US 41.59 billion by 2023. Hence, increasing
  adoption of cloud-based services is expected to
  drive growth of the algorithmic trading market.
• Growing demand for AI-based services in the
  financial sector is driving growth of the
  algorithmic trading market. In algorithmic
  trading, AI helps to adopt market conditions,
  learn from experiences and make trade decisions
  accordingly. Trading houses such as Blackrock,
  Renaissance Technologies, and Two Sigma among
  others use AI for selecting stocks. According to
  Coherent Market Insights, in 2018, about 37 of
  the financial institutions in India invested in
  artificial intelligence-focused technologies, and
  around 68 plan to adopt it in the near future.
  Therefore, increasing adoption of AI in the
  financial sector is expected to drive growth of
  the Algorithmic Trading Market over the forecast
  period. Moreover, increasing adoption of
  non-equity trading algorithms by institutional
  asset managers is another factor driving growth
  of the algorithmic trading market.

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• Moreover, increasing disposable income has led to
  an increased trading activity which makes it an
  important factor driving the growth of the
  algorithmic trading market. According to India
  Brand Equity Foundation (IBEF), in 2018, Indias
  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. Furthermore, according to
  DATA USA, in 2017, the U.S. population was 326
  million with a median age of 38.1 and a median
  household income of US 60,336. Between 2016 and
  2017, the U.S. population grew from 323 million
  to 326 million, which was an increase of 0.802,
  and its median household income grew from US
  57,617 to US 60,336 (a 4.72 increase).

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Figure. Global Napping Pods Market Value (US Mn)
Analysis and Forecast, by Application, 2017 2027
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Market Segment

• On the basis of application, the global
  algorithmic trading market is segmented into
  Equities, Forex, Commodities, Funds and Others.
  The equities segment accounted for the largest
  share in 2018, as is one of the leading asset
  classes for trading shares of companies in a
  secured, controlled, and managed environment. An
  equity market, also known as stock market or
  share market, is a market where shares of
  companies or entities are issued and traded,
  either through exchanges or through dealers or
  brokers. The place where the stocks in an equity
  market are traded is the 'Stock Exchange'.
• For instance, the equity shares in India are
  traded through two stock exchanges National
  Stock Exchange of India (NSE) and Bombay Stock
  Exchange (BSE). In equity, algorithmic trading is
  used to execute a large market order by using
  automated pre-programmed trading instructions
  accounting for variables such as price, time, and
  volume. In equities, algorithmic trading is
  simply a way to minimize cost, market impact, as
  well as risk in execution of an order.

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• On the basis of region, algorithmic trading
  market is segmented into North America, Europe,
  Asia Pacific, Latin America, Middle East, and
  Africa. North America algorithmic trading market
  contributed the largest market share in 2018
  owing to technological advancements and
  increasing application of algorithm trading among
  various end-users such as banks and financial
  institutions in the region.
• According to SelectUSA, financial markets in the
  U.S. are the largest and most liquid in the
  world. In 2017, the finance and insurance sector
  in the U.S. accounted for 7.5 (or US 1.45
  trillion) of the countrys gross domestic
  product. In April 2018, BMO Capital Markets, the
  investment and corporate banking arm of BMO
  Financial Group, announced a multi-year strategic
  partnership with Clearpool Group, a provider of
  advanced electronic trading software. Under this
  agreement, Clearpool will provide BMO with a
  fully customizable algorithmic management system
  (AMS) infrastructure to execute Canada equities
  for BMO's institutional clients.

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Market Opportunities

• Furthermore, several algorithmic trading solution
  providers in North America are focused on
  integrating Artificial Intelligence (AI) and
  Machine Learning (ML) functionalities with their
  existing algorithmic trading platforms.
• For instance, in May 2018, Bloomberg announced
  the launch of a new price forecasting application
  for investment professionals, which is powered by
  AI. The Alpaca Forecast AI Prediction Matrix is
  an application (app), which provides short-term
  market price forecasts for major markets such as
  EUR/USD, AUD/JPY, USD/JPY, CME Nikkei 225 Futures
  Index, and US 10-year treasury bonds, using the
  Bloombergs Market Data Feed (B-PIPE). Such
  factors are expected to aid in growth of the
  algorithmic trading market in North America over
  the forecast period.
• Moreover, in April 2016, the U.S. Securities and
  Exchange Commission (SEC) approved a rule
  proposed by the Financial Industry Regulatory
  Authority (FINRA) to reduce market manipulation
  that requires algorithmic trading developers to
  register as security traders.

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Key Players in the Global Algorithmic Trading
Market

• Some of the key players operating in the global
  algorithmic trading market include 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.

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• Reference https//www.coherentmarketinsights.com
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