Technavio’s market research analysts predict the global automated trading market to grow steadily during the forecast period and post a CAGR of more than 10% by 2020. This industry research report identifies the increasing demand for market surveillance to be one of the major factors that will have a positive impact on the growth of this market in the coming years. The high demand for market surveillance will drive compliance requirements, which will compel market participants to track their investment patterns and trading activities. The need to build an economy with international as well as regional interdependencies will help market players to have the best global assets. As a result, vendors are formulating effective strategies to build high-risk infrastructure and augment the equity market, which will also help them position themselves in the new trading value chain by connecting different geographies. Additionally, vendors are also constantly investing in technologies and algorithmic platforms to help businesses and individual institutional investors.
The adoption of portfolio risk solutions will be one of the major trends that will gain traction in this market in the coming years. To provide a transparent and detailed solution to clients and investors to invest in specific markets, vendors will start offering risk and scenario analytics for hedging, real-time pricing, and capital management of multi-asset portfolios. This will help professionals deal with finance products and obtain information to produce cash flows and analytics at the portfolio level.
Competitive landscape and key vendors
Characterized by the presence of a considerable number of vendors, this market appears to be highly fragmented. Major vendors such as Citadel, KCG, Optiver, and Two Sigma Investments dominate the industry. Since all vendors compete to gain maximum market shares, the competitive environment in the market is quite fierce. Technological advancements will lead to the entry of several new vendors who engage in single and multi-dealer platforms, which in turn, will intensify the competition among existing vendors. Due to the complexity and insufficient reporting, the market lacks transparency. As a result, market players such as central banks and governments have the need to frame mechanisms that ensure a timely and independent monitoring system.
The leading vendors in the market are -
Two Sigma Investments
The other prominent vendors in the market 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.
Geographical segmentation and analysis of the automated trading market
This market research and analysis estimates that in terms of geographical regions, the Americas will be the major contributor to the market in the next four years. The continuous trade monitoring and surveillance in the FX spot market will lead to a rapid increase in FX trading activities in this region. The significant role of the sell-side dealers will increase auditable standards in trading activities and will bring about easy communications between traders. Customers in this region are currently preferring strategies that will provide opportunities of statistical and risk arbitrage and can be easily implemented by using new pairs of algorithm functionalities.
Key questions answered in the report include
What will the market size and the growth rate be in 2020?
What are the key factors driving the global automated trading market?
What are the key market trends impacting the growth of the global automated trading market?
What are the challenges to market growth?
Who are the key vendors in the global automated trading market?
What are the market opportunities and threats faced by the vendors in the global automated trading market?
Trending factors influencing the market shares of the Americas, APAC, and EMEA.
What are the key outcomes of the five forces analysis of the global automated trading market?