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High Frequency Trading in the US: Market Research Report

Market Research • Market Size • Industry Statistics • Industry Analysis • Industry Trends

High Frequency Trading Market Research Report | Advisory & Financial Services | Financial Intermediaries | Feb 2012

High times: Regulation and saturation will keep this profitable industry constrained

IBISWorld’s High Frequency Trading market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

Report Snapshot
Market Share of Companies
Getco Getco market share
Renaissance Technologies Renaissance Technologies market share
Industry Statistics & Market Size
Revenue
$28bn
 Annual Growth 07-12
11.6%
 Annual Growth 12-17
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Profit
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 Employment
6,276
 Businesses
459
Industry Analysis & Industry Trends

Industry Report - Industry Investment Chapter

Capital intensity in the High Frequency Trading industry is high. Operators use highly sophisticated technologies to execute trades on a daily basis. Depreciation costs account for nearly 6.0% of a typical firm's total revenue due to expenditure on hardware and software. Meanwhile, labor costs account for about 3.0% of industry revenue. The capital-to-labor ratio is 1.98:1.0, meaning that for every dollar spent on labor costs, nearly $2 is put toward capital. Over the five years to 2012, this ratio has grown significantly – from 1.39:1.0 – indicating the advancement of technology and the industry's need for larger-capacity servers.

While technology overshadows labor's importance in the industry, engineers and developers are highly sought employees. The... purchase to read more

 


Industry ProductsRelated ReportsTable of Contents

What is the High Frequency Trading Industry?

Firms in this industry primarily use high-speed and sophisticated computer programs to establish and liquidate stock positions in very short time frames, thereby generating a large number of trades on a daily basis. Companies may be organized as proprietary trading firms, as the proprietary trading desk of a multiservice broker-dealer or as a hedge fund. In each case, participants seek to end the trading day in a flat position and avoid carrying significant unhedged positions overnight.

Industry Products
Statistical tradingTicker-tape tradingDesignated market making (DMM)
 
Industry Activities
Statistical tradingTicker tape tradingMarket making


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