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Algorithmic trading or automated trading is a way of conducting transactions using mechanical programmed trading rules based on historical data. This kind of trading tries to leverage both the speed and computing power of modern computers as compared to humans in terms of market conditions. In these systems uses mathematical algorithms which are programmed into their systems to perform calculations for them. The programs that are created are used to scan market data in order to find patterns in which to make a trading decision.
Market Dynamics
Launch of new platforms is expected to propel growth of the global
algorithmic
trading market. For instance, in November 2020, TomiEX announced the launch
of its decentralized platform operating on the delegated Proof-of-Stake
algorithm. The TomiEX exchange will feature postmining technology for its
native TEX Coin and modern specifications that ensure a high quality of
algorithmic trading for its users.
Adoption of AI in algorithmic trading is expected to offer
lucrative growth opportunities for players in the global algorithmic trading
market. For instance, in October 2020, RBC Capital Markets launched a new
electronic trading platform using artificial intelligence technology, which was
developed by its traders in partnership with AI scientists.
Among regions, North America is expected to witness significant
growth in the algorithmic trading market, owing to launch of new applications
in the region. For instance, in May 2020, Streak, the strategy development and
algorithmic trading provider for retail investors, launched its Streak
application in the United States.
The algorithmic trading market in Asia Pacific is witnessing new
regulations in algorithmic trading. For instance, in June 2020, Securities and
Exchange Board of India, a market regulator in India, implemented new framework
on order-to-trade ratio (OTR) of algorithmic trading orders placed by stock
brokers.
Similarly, the algorithmic trading market in Europe is also
witnessing new regulations in algorithmic trading. For instance, in June 2020, The
FICC Markets Standards Board (FMSB) published a new Statement of Good Practice
on Algorithmic Trading in FICC Markets as a transparency draft for market
consultation.
Competitive Analysis
Major players operating in the global algorithmic trading market
include, AlgoTrader GmbH, Trading Technologies International, Inc., Tethys
Technology, Inc., Tower Research Capital LLC, Lime Brokerage LLC, InfoReach,
Inc., FlexTrade Systems, Inc., Alphabot.ai, Hudson River Trading LLC, Citadel
LLC, Streak, and Virtu Financial.
September 2020: Finway, a leading Financial Services Company in
India, partnered with Alphabot.ai, a pioneer in algorithmic trading in India,
to venture into the field of stock trading.
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