A Big Boom is likely in Algorithm Trading

Market in the next 5 years

Photo: Business Standard 

As the demand for new innovative solutions increases and more startups arise in the space,  a spurt in demand for the Algorithm Trading Software is expected during the period 2019 to 2024. 

Types:

• Forex Algorithm Trading
• Stock Algorithm Trading
• Fund Algorithm Trading
• Bond Algorithm Trading
• Cryptographic Algorithm Trading

The global algorithmic trading market is expected to register a CAGR of 11% in the forecast period (2019 - 2024).

Some of the Key Players:

• Thomson Reuters 
• 63 Moons Technologies 
• Tata Consultancy Service
• Symphony Fintech
• Argo SE
• Kuberre Systems
• Virtu Financial

Highlights:

#The major growth drivers are:

• Rising demand for fast, reliable, and effective order execution, with a view to reduce transactional costs. Institutional investors and big brokerage houses have been using algorithmic trading to cut down on costs associated with bulk trading.
• Further, increasing government regulations and growing demand for market surveillance is helping the market growth. Traders keep track of their trading activities and investment portfolios by using market surveillance technology. 
• Moreover, the emergence of AI in the financial service sector is expected to be a major factor aiding in the growth of the algorithmic trading market.
• Also, algorithmic trading creates a highly liquid market due to rapid buy and sell orders without any human intervention. But, on the flip side this method can also lead to an instant loss of liquidity, which can restrain market growth. For instance, algorithmic trading was a significant factor in causing a loss of liquidity in currency markets after the Swiss franc discontinued its Euro peg in 2015.

#The cloud-based algorithmic trading platforms are expected to gain the maximum market traction during 2019 -24 period because cloud-based trading solutions help traders to gain maximum profits and effectively automate the trading process, apart from other benefits  like easy trade data maintenance, cost-effectiveness, scalability, and effective management.

• Cloud computing is a model which makes use of networks of remote servers usually accessed over the internet, to store, manage, and process data. 
• Cloud technology often helps in cost savings or improves business agility and responsiveness. 
• Cloud-based trading removes all the complexities to provide an extraordinarily powerful environment which allows the traders to focus more on developing trading strategies that work. 
• Due to the convenience of the cloud, traders can use the cloud service to check new trading strategies, backtest and run-time series analysis along with executing trades. 
• It also helps the traders to access real-time data and access the data anywhere at any time. 
• According to LogicMonitor's survey, 41% of enterprise workloads will be run on public cloud platforms like Amazon AWS, Google Cloud Platform, IBM Cloud, Microsoft Azure, and others, by 2020.
• On-premise workloads are also predicted to shrink from 37% as of today to 27% of all workloads by 2020.
• Financial Services has the highest percentage of server images deployed in private or public clouds, approaching nearly 100% Vs a median adoption rate of 19%.

Conclusion: 

Mumbai-based 63 Moons Technologies Ltd (Rs.101.85) is a small-cap IT company that is engaged in providing computer programming, consultancy related services. 

The company has filed a damage suits of Rs.10,000 crore against P Chidambaram and others, in their individual capacities for taking mala fide actions by abusing their powers.

Meanwhile,  Jignesh Shah who also help set up the flagship Multi-Commodity Exchange (MCX), said in September this year that the recovery group at NSEL has managed to establish full money trail of the entire amount of ₹5,600 crore, assets worth over ₹8,000 crore of defaulters have been attached, ₹3,300 crore of decrees and arbitration awards have been obtained and the same for the balance amount was underway.

"If we get cooperation from the agencies and the government, in the next 3-4 months, we can obtain full decrees for all 17 defaulters for the entire amount of ₹5,600 crore, along with arbitration awards and injunctions.



The 52-year-old businessman, who went on to be known as 'India's Exchange Man' for successfully launching 14 exchanges across six continents, including MCX in 2003, has been fighting a prolonged legal battle on multiple fronts ever since NSEL (National Spot Exchange Ltd) crisis broke out in 2013.

After setting up 14 exchanges across six continents in a span of ten years, engineer-turned-financial market wizard engineer-turned-financial market wizard Jignesh Shah now sees 100-times bigger business potential in a 'startup ecosystem' which he feels can create up to 10 crore jobs over the next decade.

Jignesh Shah is now the Chairman Emeritus of 63 Moons Technologies, the rechristened and re-booted version of the Financial Technologies India Ltd (FTIL), the erstwhile parent holding firm for all the exchanges founded by him.

One of the latest victories for him came late August,  2019, when the Bombay High Court ruled that the NSEL was not a financial establishment and quashed the attachment of assets, including bank accounts and properties, of 63 Moons Technologies, the parent company of Shah-led group which was earlier known as Financial Technologies (FT).

The Supreme Court has also set aside a government order to merge NSEL with 63 Moons, while the NCLT last year had dismissed a plea of the Corporate Affairs Ministry to supersede the 63 Moons' board.

Moreover, the Asia-Pacific region will occupy for more market share in following years in algorithm trading space, especially in China, also fast growing India and Southeast Asia regions.

Hence,  looking at the huge opportunities in future one can invest in the shares of 63 Moons Technologies Ltd at around Rs.102/103 for short term targets of Rs.121/127/131. SL: Rs.96. The stock 63 Moons Technologies  Ltd,  the erstwhile Financial Technologies fell from around Rs.3000 to the CMP of Rs.101.85. This is a turnaround story and hence is expected to give significant return to the investors.

Bibliography: Inputs from web searches...