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Global Algorithmic Trading Software Market Size Forecast 2024 - 2033

19 Dec, 2024

What Is The Overview Of The Global Algorithmic Trading Software Market?

Algorithmic trading software automates the execution of trading strategies based on 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.

Algorithmic Trading Software Global Market Report 2024 provides data on the global algorithmic trading software market such as market size, growth forecasts, segments and geographies, competitive landscape including leading competitors’ revenues, profiles and market shares. The Algorithmic Trading Software market report identifies opportunities and strategies based on market trends and leading competitors’ approaches.

What Projections Can We Expect For The Size And Growth Rates Of The Global Algorithmic Trading Software Market?

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 rise in regulatory changes, the increasing complexity of financial markets, cost efficiency and operational scalability, the rise of globalization of financial markets, growing demand for alpha generation, and outperformance in 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%. The growth in the forecast period can be attributed to expansion of quantitative trading strategies and the adoption of algorithmic trading, increasing emphasis on risk management and compliance requirements, rise in demand for customization and flexibility, rise in shift toward cloud-based solutions. Major trends in the forecast period include 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, focus on improving user experience (UX) and interface design.

What Are The Core Factors Supporting Growth In The Algorithmic Trading Software Market?

The rising market liquidity is expected to propel the growth of the algorithmic trading software market going forward. Market liquidity refers to the process by which assets can be bought or sold in a market without causing significant price changes. The rise in market liquidity can be attributed to increased trading activity, improved market infrastructure, enhanced transparency, and regulatory reforms promoting market efficiency and facilitating faster and more efficient order execution. Algorithmic trading software relies on market liquidity to execute trades swiftly and efficiently. Market liquidity enables algorithmic traders to deploy various trading strategies, including market making, statistical arbitrage, trend following, and volatility trading. For instance, in August 2023, according to the International Monetary Fund, a US-based financial agency, trading volume by institutional investors in crypto exchanges surged over 1700% from around $25 billion to over $450 billion between the second quarters of 2020 and 2021. Therefore, the increasing market liquidity is driving the algorithmic trading software market.

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What Are The Major Segments Within The Global Algorithmic Trading Software Market?

The algorithmic trading software market covered in this report is segmented –
1) By Component: Solutions, Services
2) By Product: Algorithmic Trading Software, Algorithmic Trading Platforms
3) By Deployment: Cloud Based, On Premise
4) By Application: Investment Banks, Funds, Personal Investors, Other Application

Which Trends Are Expected To Transform The Algorithmic Trading Software Market?

Major companies in the algorithmic trading software market are focusing on developing next-generation algorithmic trading platforms. These advanced software systems are designed to execute automated trading strategies in financial markets. For example, in September 2022, Scotiabank, a Canada-based multinational banking and financial services company, collaborated with BestEx Research Group LLC, a US-based provider of algorithmic trading solutions, to launch a next-generation algorithmic trading platform. This platform features cutting-edge technology tailored to meet the specific needs of Canadian market participants. It aims to provide Scotiabank clients with superior algorithmic execution quality and trading performance, leveraging research-driven logic to reduce costs for institutional investors. Part of Scotiabank's ScotiaRED suite of electronic trading products, this platform offers a single-ticket order experience across the Americas. The market for these platforms is projected to reach $2023 billion in 2023, $2024 billion in 2024, and $2028 billion by 2028.

What Is The Fastest Growing Region In The Algorithmic Trading Software Market?

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.