Artificial Intelligence is fastest growing segment fueling the growth of algorithmic trading market
The global algorithmic trading Market is estimated to be valued at US$ 2.18 Bn in 2023 and is expected to exhibit a CAGR of 7.2% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview: Algorithmic trading
involves the use of computer programs and software to automatically place a
large number of orders and trades based on predefined rules. It provides
advantages like faster execution of orders, lower transaction cost and
minimizes human errors. With the increasing digitization and development of
advanced technologies, there is a growing need for automated trading strategies
in financial markets.
Market key trends: One of the key
trends in the algorithmic
trading market size is growing adoption of artificial intelligence and
machine learning technologies. These advanced technologies are helping market
participants build more sophisticated algorithms and predictive trading models.
Machine learning algorithms can analyze huge amounts of historical market and
trading data to identify patterns and trends. This data-driven approach allows
algorithms to learn from past behaviors and outcomes. As a result, AI-powered
algorithms are becoming more accurate in predicting price movements and timing
of trades, thereby improving overall trading performance.
Segment Analysis
Content: The algorithmic trading market is segmented by type into forex, stock
markets, exchange-traded funds (ETFs), cryptocurrencies, and bonds. Among
these, the forex segment dominated the market in 2022 and is expected to
continue its dominance during the forecast period. This is owing to high
liquidity in the forex market compared to other markets. Forex experiences
almost round-the-clock trading due to its decentralized structure. The
risk/reward ratio and average daily trading volumes in the forex market attract
algorithmic traders the most.
Key Takeaways
Market size: The global algorithmic trading market size was valued at US$ 2.18
Bn in 2023. The market is expected to witness high growth, exhibiting a CAGR of
7.2% over the forecast period of 2023 to 2030, owing to increasing demand for
advanced trading technologies to gain a competitive advantage.
Regional analysis: North America held the largest share of the global
algorithmic trading market in 2023 due to presence of majority global
investment banks and hedge funds investing heavily in the trading space. Europe
and Asia Pacific are expected to be the fastest growing regional markets
supported by increasing adoption of algorithmic trading models among retail
traders in these regions.
Key players: Key players operating in the algorithmic trading market include 63
Moons Technologies Limited, MetaQuotes Software Corp., Algo Trader AG,
Refinitiv Ltd, and Virtu Financial Inc. 63 Moons Technologies Limited and
MetaQuotes Software Corp. are established developers and providers of
algorithmic trading platforms globally.
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