Global High-frequency Trading Server Market was valued at US$ 387.9 Mn in 2019 and is expected to reach US$ xx Mn by 2026, at a CAGR of xx%.
Global High-frequency Trading Server Market Introduction
Fast-frequency trading (HFT) is a type of algorithmic financial trading that trades at high speeds, with high turnover rates, and high order-to-trade ratios, using high-frequency financial data and electronic trading instruments. Although there is no one definition of high-frequency trading, essential characteristics include co-location, extremely complex algorithms, and very short investment horizons.
Global High-frequency Trading Server Market Dynamics
Over the forecast period, the market is expected to grow due to the need for Ultra-Low Latency (ULL) in the trading environment and advances in quantum computing in financial services. Furthermore, future development is projected to be fuelled by an increase in the need for intent-based networking in a high-frequency trading environment. High-frequency trading (HFT) servers use mathematical algorithms to enable high-speed trading transactions in nanoseconds or less. High-power computational analysis, which beats traditional stock trading servers, is one of the key characteristics for such high-speed executions.
Market companies have increased their expenditures in developing advanced solutions to minimise network latency in recent years. For example, in 2019, Ciara, a Hypertec brand, released three low-latency servers: ORION HF210-G5, ORION HF610T-G4, and ORION HF310-G4, all of which were designed specifically for high-frequency transactions and minimising trading delays. Servers of this sort are also responsible for multi-billion-dollar gains for trading businesses, opening doors for server Original Design Manufacturers (ODMs). In order to manage many orders and execute quick data analysis and correlation in a high-frequency trading environment, an ultra-low latency feed is required. As a result, trading businesses have moved their data centres closer to stock exchanges in order to provide quicker feeds for trading apps. Proximity to a stock market allows trading businesses to have access to high-bandwidth networks with low latency connections, resulting in improved outcomes and, as a result, increased demand.
Algorithmic-based trading in equities markets is anticipated to gain popularity in the coming years. Equity traders can use algorithm-based trading to develop and adjust stop-loss strategies. Large portfolios may be difficult to manage since stock markets are both turbulent and unpredictable. As a result, combining stop-loss techniques with HFT systems is likely to aid trading businesses in risk management and loss prevention, while also providing possibilities for servers that host these applications.
Global High-frequency Trading Server Market Segment Analysis
In 2020, the x-86 category had the highest revenue share of more than 80%. The large-scale adoption of x-86 core processors and the industry’s reliance on software code based on the x-86 architecture can be credited to the segment’s rise. Furthermore, x86 processors are suitable for high-performance computing applications such as data analytics workloads and artificial intelligence (AI) that need quick computations. These features enable financial service providers to conduct trade operations with minimal latency. Over the forecast period, the ARM-based CPU category is expected to grow at the fastest rate. The growing usage of cloud-based migration tools that assist companies in porting server applications to ARM architecture might be contributed to the segment’s growth. Furthermore, ARM-based servers are less expensive than X86-based servers, supporting segment growth.
In terms of revenue, the equities trading segment had the greatest market share in 2020, accounting for almost 41%. The increasing penetration of HFT trading platforms, particularly in large-cap equities markets, can be linked to the segment’s rise. The market has been divided into equities trading, foreign exchange, commodities markets, and other categories based on application. From 2020 to 2026, the Foreign Exchange (FOREX) market is expected to be the fastest-growing segment. The success of stock trading has inspired the introduction of high-frequency trading (HFT) in currency markets, opening up new development opportunities. Traders in these marketplaces want to increase their profits by using low-latency servers to conduct trades on stock exchanges.
Global High-frequency Trading Server Market
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Global High-frequency Trading Server Market Regional Insights
Global High-frequency Trading Server Market 1
In 2020, North America had the highest revenue share, accounting for more than 40% of total revenue. The region’s market growth was aided by the early acceptance of technology and the penetration of trading platforms. Furthermore, the presence of prominent suppliers such as HP Inc., Dell Technologies, and Hypertec, which provide required technical help for financial firms to install after-sales services, is one of the reasons driving the regional market growth. Over the forecast period, increased use of algo-based trading in secondary markets for high-speed trading execution is projected to fuel demand for HFT servers.
Over the projected period, Asia Pacific is expected to be the fastest-growing regional market. Initiatives conducted by the Chinese government to promote automated trading in financial markets led to market growth and this trend is likely to continue over the next several years. Developed economies, including Japan and Australia, are projected to see steady development throughout the forecast period, which may be attributed to the early adoption of HFT systems.
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Global High-frequency Trading Server Market 2
Global High-frequency Trading Server Market, by Region
• North America
• South America
• Asia Pacific
Global High-frequency Trading Server Market Key Players
• ASA Computers, Inc.
• Blackcore Technologies
• HP enterprise Development LP
• Hypershark Technologies
• Penguin Computing
• Super Micro Computer, Inc.
• Tyrone Systems
• XENON Systems Pty Ltd
• Hewlett Packard Enterprise Company
• Lenovo Group Limited
• Business Systems International Ltd
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