Algorithmic Trading Market, 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, 2018 – 2026

  • Published On : Feb 2019 |
  • Pages : 166 Pages |
  • Format : CMI Insight PPT Format CMI Insight PDF Format

Algorithmic Trading Market – Insights

Algorithmic trading, algo trading, automated trading, or black box trading is a technological advancement in the stock market. It is a programed process that runs on a computer, which follows a specific set of instructions (an algorithm) for placing a trade in order to generate profits at a speed and frequency that is impossible for a human trader. Algorithmic trading is gaining significant traction, which is useful for financial market and accepted by various countries such as the U.S., India, the U.K., and South Korea. Accuracy, exceptional speed and liquidity are the unique features of algorithmic trading, which will result in exponential growth of algorithmic trading market in the near future.

Global algorithmic trading market is expected to witness significant growth during the forecast period (2018-2026). This is attributed to increasing adoption of cloud-based solutions, services, and cloud computing for algorithmic trading. Traders use the cloud services to check backtest, trading strategies, and run-time series analysis with executing trade. Traders choose cloud computing as it is capital intensive to build one’s own data centers for services such as data storage, backup and recovery, data management and networking traders. Therefore, it is easier to rent space over cloud rather than developing software/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 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 financial sector drives growth of the algorithmic trading market. In algorithmic trading, AI helps to adopt market conditions, learn from experiences, and accordingly make trade decisions. Trading houses such as Blackrock, Renaissance Technologies, Two Sigma, and others, are using 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 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.  

Moreover, owing to increasing disposable income has let to increasing trading activity. Henceforth, increasing disposable income is one of the driving factor of algorithmic trading market.  According to IBEF (India Brand Equity Foundation), in 2018 total rural income is at around US$ 572 billion, is projected to reach US$ 1.8 trillion by year 2021. India’s rural per capita disposable income is estimated to increase at a CAGR of 4.4 per cent to US$ 631 by 2020

Figure: Global Algorithmic Trading Market, by Region, 2026 (%)

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. This is due to strong technological advancements and considerable application of algorithm trading among various end-users such as banks and financial institutions, across the region. According to SelectUSA, financial markets in the U.S. are the largest and most liquid in the world. In 2017, finance and insurance sector represented 7.5% (or US$ 1.45 trillion) of U.S. gross domestic product.  For instance, in April 2018, BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group, announced 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.

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.

Key Players in the Global Algorithmic Trading Market:

Some of the key players operating in the 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.

Algorithmic trading, also termed as algo trading, is a method that uses computer programs and software to execute various trades with minimal human intervention. It has gained significant traction in the financial industry as it allows investment managers to be in full control of their trading process with reduced transactional costs. High frequency trading (HFT), which involves selling and buying of shares (mostly in thousands) in seconds, is one of the most popular method in algo trading. The computer-programmed trading follows a defined set of rules for trading. The technology incorporates human as well as artificial intelligence, which enables higher accuracy and reliability among users.

Market Dynamics

Rising number of financial organizations and investors opting for automation of trading processes is one of the major factor driving scale adoption of algo trading in the market. For instance, in April 2018, SEBI announced plans for new norms that will make algorithmic trading more accessible for investors. According to Coherent Market Insights, in year 2018, in India, algorithmic trading gained popularity among institutional investors for investment banks, hedge funds, and accounts for 35-40% of the turnover on the exchange. Moreover, emerging economies such as India, South Korea, and others, who have expanded its reach on international platforms with diverse distribution and portfolio has increased demand for algo trading process.  

Key features of the study:

  • This report provides in-depth analysis of algorithmic trading market size (US$ Million), and Compound Annual Growth Rate (CAGR %) for the forecast period (2018– 2026), considering 2017 as the base year
  • It elucidates potential revenue opportunity across different segments and explains attractive investment proposition matrix for this market
  • This study also provides key insights about market drivers, restraints, opportunities, new product launches or approvals, regional outlook, and competitive strategy adopted by leading players
  • It profiles leading players in the global algorithmic trading market based on the following parameters – company overview, financial performance, product portfolio, geographical presence, algorithmic trading market capital, key developments, strategies, and future plans
  • Companies covered as part of this study 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
  • Insights from this report would allow marketers and the management authorities of companies to make informed decision regarding their future product launches, product upgrades, market expansion, and marketing tactics
  • The global algorithmic trading market report caters to various stakeholders in this industry including investors, suppliers, manufacturers, distributors, new entrants, and financial analysts
  • Stakeholders would have ease in decision-making through the various strategy matrices used in analyzing the global algorithmic trading market

Detailed Segmentation:

  • Global Algorithmic Trading Market, By Component:
    • Software
    • Services
      • Managed Services
      • Professional Services (Maintenance, Integration, Consulting)
  • Global Algorithmic Trading Market, By Deployment Model:
    • On-Premise
    • Cloud
      • Private Cloud
      • Public Cloud
    • Hybrid
  • Global Algorithmic Trading Market, By Application:
    • Equities
    • Forex
    • Commodities
    • Funds
      • Mutual
      • Hedge
      • Pension
    • Others (Insurance, Bonds, Virtual Currency, etc.)
  • Global Algorithmic Trading Market, By Geography:
    • North America
      • By Component
        • Software
        • Services
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
      • By Deployment Model
        • On-Premise
        • Cloud
          • Private Cloud
          • Public Cloud
        • Hybrid
      • By Application
        • Equities
        • Forex
        • Commodities
        • Funds
          • Mutual
          • Hedge
          • Pension
        • Others (Insurance, Bonds, Virtual Currency, etc.)
      • By Country:
        • U.S.
        • Canada
    • Europe
      • By Component
        • Software
        • Services
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
      • By Deployment Model
        • On-Premise
        • Cloud
          • Private Cloud
          • Public Cloud
        • Hybrid
      • By Application
        • Equities
        • Forex
        • Commodities
        • Funds
          • Mutual
          • Hedge
          • Pension
        • Others (Insurance, Bonds, Virtual Currency, etc.)
      • By Country:
        • Germany
        • UK
        • France
        • Italy
        • Spain
        • Russia
        • Rest of Europe
    • Asia Pacific
      • By Component
        • Software
        • Services
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
      • By Deployment Model
        • On-Premise
        • Cloud
          • Private Cloud
          • Public Cloud
        • Hybrid
      • By Application
        • Equities
        • Forex
        • Commodities
        • Funds
          • Mutual
          • Hedge
          • Pension
        • Others (Insurance, Bonds, Virtual Currency, etc.)
      • By Country:
        • China
        • India
        • Japan
        • Australia
        • South Korea
        • ASEAN
        • Rest of Asia Pacific
    • Latin America
      • By Component
        • Software
        • Services
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
      • By Deployment Model
        • On-Premise
        • Cloud
          • Private Cloud
          • Public Cloud
        • Hybrid
      • By Application
        • Equities
        • Forex
        • Commodities
        • Funds
          • Mutual
          • Hedge
          • Pension
        • Others (Insurance, Bonds, Virtual Currency, etc.)
      • By Country:
        • Brazil
        • Mexico
        • Rest of Latin America
    • Middle East
      • By Component
        • Software
        • Services
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
      • By Deployment Model
        • On-Premise
        • Cloud
          • Private Cloud
          • Public Cloud
        • Hybrid
      • By Application
        • Equities
        • Forex
        • Commodities
        • Funds
          • Mutual
          • Hedge
          • Pension
        • Others (Insurance, Bonds, Virtual Currency, etc.)
      • By Country:
        • GCC Countries
        • Israel
        • Rest of Middle East
    • Africa
      • By Component
        • Software
        • Services
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
      • By Deployment Model
        • On-Premise
        • Cloud
          • Private Cloud
          • Public Cloud
        • Hybrid
      • By Application
        • Equities
        • Forex
        • Commodities
        • Funds
          • Mutual
          • Hedge
          • Pension
        • Others (Insurance, Bonds, Virtual Currency, etc.)
      • By Country:
        • North Africa
        • Central Africa
        • South Africa
  • Company Profiles
    • AlgoTrader GmbH  
      • Company Overview
      • Product Portfolio
      • Financial Performance
      • Key Strategies
      • Recent Developments/ Updates
    • 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
    • Virtu Financial

 “*” marked represents similar segmentation in other categories in the respective section.

Table of Contents

  1. Research Objective and Assumption
    • Research Objectives
    • Assumptions
    • Abbreviations
  2. Market Purview
    • Report Description
      • Market Definition and Scope
    • Executive Summary
      • Market Snippet, By Component
      • Market Snippet, By Deployment Model
      • Market Snippet, By Application
      • Market Snippet, By Region
    • Coherent Opportunity Map (COM)
  3. Market Dynamics, Regulations, and Trends Analysis
    • Market Dynamics
      • Drivers
      • Restraints
      • Market Opportunities
    • Regulatory Scenario
    • Industry Trend
    • Merger and Acquisitions
    • New system Launch/Approvals
    • Value Chain Analysis
    • Porter’s Analysis
  4. Global Algorithmic Trading Market, By Component, 2018-2026  (US$ Million)
    • Introduction
    • Segment Trends
      • Software
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
      • Services
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
          • Managed Services
          • Professional Services (Maintenance, Integration, Consulting)
  5. Global Algorithmic Trading Market, By Deployment Model, 2018-2026  (US$ Million)
      • On-premise
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
      • Cloud
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
          • Private Cloud
          • Public Cloud
      • Hybrid
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
  6. Global Algorithmic Trading Market, By Application, 2018-2026  (US$ Million)
    • Introduction
    • Segment Trends
      • Equities
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
      • Forex
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
      • Commodities
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
      • Funds
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
          • Mutual
          • Hedge
          • Pension
      • Others (Insurance, Bonds, Virtual Currency etc.)
        • Introduction
        • Market Size and Forecast, 2018–2026, (US$ Million)
  7. Global Algorithmic Trading Market, By Regions, 2018-2026 (US$ Million)
    • Introduction
      • Market Share Analysis, By Region, 2017 and 2026 (%)
    • North America
      • Regional Trends
      • Market Size and Forecast, By Component, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Deployment Model, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Application Type, 2018–2026 (US$ Million)
      • Market Share Analysis, By Country, 2017–2026 (%)
        • U.S.
        • Canada
    • Europe
      • Regional Trends
      • Market Size and Forecast, By Component, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Deployment Model, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Application Type, 2018–2026 (US$ Million)
      • Market Share Analysis, By Country, 2017 and 2026 (%)
        • UK
        • Germany
        • Italy
        • France
        • Russia
        • Rest of Europe
    • Asia Pacific
      • Regional Trends
      • Market Size and Forecast, By Component, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Deployment Model, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Application Type, 2018–2026 (US$ Million)
      • Market Share Analysis, By Country, 2017 and 2026 (%)
        • China
        • India
        • Japan
        • ASEAN
        • Australia
        • South Korea
        • Rest of Asia Pacific
    • Latin America
      • Regional Trends
      • Market Size and Forecast, By Component, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Deployment Model, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Application Type, 2018–2026 (US$ Million)
      • Market Share Analysis, By Country, 2017 and 2026 (%)
        • Brazil
        • Argentina
        • Mexico
        • Rest of Latin America
    • Middle East
      • Regional Trends
      • Market Size and Forecast, By Component, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Deployment Model, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Application Type, 2018–2026 (US$ Million)
      • Market Share Analysis, By Country, 2017 and 2026 (%)
        • Israel
        • GCC Countries
        • Rest of the Middle East
    • Africa
      • Regional Trends
      • Market Size and Forecast, By Component, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Deployment Model, 2018–2026 (US$ Million)
      • Market Size and Forecast, By Application Type, 2018–2026 (US$ Million)
      • Market Share Analysis, By Country, 2017 and 2026
        • North Africa
        • Central Africa
        • South Africa
  8. Competitive Landscape
    • Company Profiles
      • AlgoTrader GmbH
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Trading Technologies International, Inc.
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Tethys Technology, Inc.
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Tower Research Capital LLC
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Lime Brokerage LLC
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • InfoReach, Inc.
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • FlexTrade Systems, Inc.
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Hudson River Trading LLC
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Citadel LLC
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Virtu Financial
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
    • Analyst Views
  9. Section
    • References
    • Research Methodology
    • About us and Sales Contact

*Browse 60 market data tables and 40 figures on "Algorithmic Trading Market - Global forecast to 2026”.

Research Methodology

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  • Primary Research (Trade Surveys and Experts Interviews)
  • Desk Research
  • Proprietor Data Analytics Model

In addition to this, Coherent Market Insights has access to a wide range of the regional and global reputed paid data bases, which helps the company to figure out the regional and global market trends and dynamics. The company analyses the industry from the 360 Degree Perspective i.e. from the Supply Side and Demand Side which enables us to provide granular details of the entire ecosystem for each study. Finally, a Top-Down approach and Bottom-Up approach is followed to arrive at ultimate research findings.


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Coherent Market Insights desk research is based on a principle set of research techniques:

  • National level desk research: It Includes research analysis of regional players, regional regulatory bodies, regional trade associations, and regional organization.
  • Multinational level desk research: The research team keeps a track of multinational players, global regulatory bodies, global trade associations, and global organization.

Coherent Market Insights has a large amount of in-house repository of industry database. This is leveraged as a burner for initiating a new research study. Key secondary sources include:

  • Governmental bodies, National and international social welfare institutions, and organizations creating economic policies among others.
  • Trade association, National and international media and trade press.
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  • Scientific journals, and other technical magazines and whitepapers.

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Preliminary Data Mining

The raw data is obtained through the secondary findings, in house repositories, and trade surveys. It is then filtered to ensure that the relevant information including industry dynamics, trends, and outlook is retained for further research process.

Data Standardization:

Holistic approach is used to ensure that the granular and uncommon parameters are taken into consideration to ensure accurate results. The information from the paid databases are further combined to the raw data in order to standardize it.

Coherent Statistical model

We arrive at our final research findings through simulation models. Coherent Data Analytics Model is a statistical tool that helps company to forecast market estimates. Few of the parameters considered as a part of the statistical model include:

  • Micro-economic indicators
  • Macro-economic indicators
  • Environmental indicators
  • Socio-political indicators
  • Technology indicators

Data Processing

Once the findings are derived from the statistical model, large volume of data is process to confirm accurate research results. Data analytics and processing tools are adopted to process large chunk of collected informative data. In case, a client customizes the study during the process, the research finding till then are benchmarked, and the process for new research requirement is initiated again.

Data Validation

This is the most crucial stage of the research process. Primary Interviews are conducted to validate the data and analysis. This helps in achieving the following purposes:

  • It provides first-hand information on the market dynamics, outlook, and growth parameters.
  • Industry experts validates the estimates which helps the company to cement the on-going research study.
  • Primary research includes online surveys, face-to face interviews, and telephonic interviews.

The primary research is conducted with the ecosystem players including, but not limited to:

  • Raw Material Suppliers
  • Manufacturers
  • System Integrators
  • Distributors
  • End-users

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