Increasing adoption of portfolio risk solutions to propel growth in the global algorithmic trading market by 2020

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Algorithmic trading: Key market research findings

  • Increasing integration of financial markets drives market growth
  • The Americas dominate the market geographically
  • Key vendors – Citadel, KCG, Optiver US, Tower Research Capital, and Two Sigma Investments

Technavio’s market research analysts predict the global algorithmic trading market to grow at a CAGR of around 10% between 2016 and 2020. The growth in this market is fueled primarily by the increased integration of financial markets. The increased integration of financial markets helps surge liquidity in the equity market and enables domestic investors buy foreign assets and foreign investors buy domestic assets at reduced risks. During 2015, the Americas dominated the global algorithmic trading market by accounting for around 75% of the overall market share and is expected to continue its market dominance throughout the forecast period.

The new industry research report from Technavio discusses in detail the key drivers and trends responsible for the growth of this market and its sub-segments.

Portfolio risk solutions are gaining traction in the market currently. This unique tool provides a transparent and detailed solution to clients and investors with respect to investing in specific markets or instruments. Several vendors in different geographical markets are now providing customized tools for stress testing and managing risks across different portfolios,” says Amit Sharma, Lead Analyst, ICT, Technavio Research.

The increasing demand for higher market surveillance plays a key role in the growth of the global algorithmic trading market. The top vendors in the market are trying to optimize their data management strategies and improve the overall efficacy.  Furthermore, dealers are also trying to set up risk management platforms to meet the demands of the growing customer base.

Due to the presence of several vendors, this market appears fragmented. Recent technological advancements have resulted in higher transparency in the market, which in turn will increase the number of participants in the FX market. Vendor competition in the market is normally based on product and service offerings. The market is also expected to witness a number of acquisitions by largealgorithmic trading companies in the coming years. The key vendors in the market include Citadel, KCG, Optiver US, Tower Research Capital, and Two Sigma Investments.

A more detailed analysis is available in the Technavio report, Global Algorithmic Trading Market 2016-2020.

We can customize reports by other regions and specific segments upon request.

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