Advancements in electronic technologies to reflect positively on the global market for automated trading during the forecast period.
Technavio has announced its latest market research report on automated trading market, which is expected to register growth at a CAGR of more than 10% during the forecast period, 2016-2020. This market analysis discusses the major drivers and key emerging trends that will influence the growth of the global automated trading market over the next four years. Some of the top vendors listed in this industry analysis include Citadel, KCG, Optiver, and Two Sigma Investments.
In terms of geographical analysis, the Americas will be the largest region in the global market, reaching revenues of more than $20 billion by 2020. The rise in a number of trading firms in the region will be the fundamental driving force behind the growth of the market in this region.
“Advancements in electronic dealing technologies is enabling both, vendors and customers in the global automated trading market to incorporate liquidity aggregation and algorithm trading across different geographies. This makes them easily accessible to a broader range of market participants. This also helps participants in the market to have better interconnectivity and more widespread sharing risks so that there can be lower trading costs through quicker execution times. This, in turn, leads to a rise in the overall total FX turnover,” says Amit Sharma, a lead analyst at Technavio.
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The new industry research report from Technavio analyzes some of the key drivers and trends responsible for the growth of this market and its sub-segments.
Higher demand for market surveillance
The demand for market surveillance is on the rise owing to the need for market participants to track their investment patterns and trading activities. Several prominent vendors in the market are trying to optimize their data management strategies and fill gaps in the system. As a result, strategies are being formulated to build a high-risk infrastructure and augment the equity market. Such developments should help exchanges to position themselves in the new trading value chain as well connect different geographical regions. Dealers in the derivatives market are also investing heavily in technologies and algorithmic platforms for businesses and individual institutional investors.
Increased integration of financial markets
The rise in the integration of financial markets helps boost liquidity in global equity markets. It also enables domestic investors to buy foreign assets and foreign investors to buy domestic assets with reduced risks involved in such transactions. The integration of different international markets is paving the way to the efficient global allocation of savings for future use. This also helps different countries create an opportunity for portfolio diversification, as also for risk sharing. In addition, both are developing as well as developed countries can make use of such diversification to enhance growth and raise standards of living. For instance, the High-quality Securitization (HQS) concept was developed in the European private sector to provide a standard, simple, and transparent securitization. The concept includes industry best practices, which has led to less onerous regulatory capital and liquidity treatment worldwide.
Algorithmic imports in Asia
The algorithmic imports into Asian markets play a significant role in driving the growth of algorithmic use in stock market trading. The huge competition in the market creates competitive pressures, especially from global banks. As a result, local banks in Asia are unable to offer customized algorithmic platforms to their clients. However, more local and regional banks in Asia are expected to develop their algorithmic trading platforms to help institutional investors in the region buy different stocks. The drastic difference in exchange rules and banking regulations among different Asian countries makes the development of a single algorithmic platform that serves multiple markets relatively complex and difficult. For instance, Barclays Capital is among those creating a dedicated development team focused on allowing a core suite of algorithms across APAC market.
Some of the other prominent vendors identified in this report are DRW Trading, Flow Traders, Hudson River Trading, Jump Trading, RSJ Algorithmic Trading, Spot Trading, Sun Trading, Tower Research Capital, Tradebot Systems, and Virtu Financial.
This research report includes an in-depth analysis and market shares and sizes of the sub-segments and geography. It provides a comprehensive analysis of the key companies, including their market shares, business overview, key financials, etc. The market study also offers a detailed analysis of key drivers, challenges, and opportunities influencing this market.
A more detailed analysis is available in the Technavio report titled, ‘Global Automated Trading Market 2016-2020‘. Technavio also customizes reports by other regions and specific segments upon request.
Other related reports:
- Global Structured Finance Market 2016-2020
- Global Microfinance Market 2016-2020
- Global Trade Finance Market 2016-2020
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