Algorithmic trading has hit the mainstream in the U.S. equities market. For operational efficiency as well as a continued drive for capturing alpha, algorithmic trading is increasingly becoming the execution tool of choice for both the sell-side and the buy-side traders. Aite Group estimates that at the end of 2006, the share of algorithmic trading will approach 33% of the total equities trading volume. By the end of 2010, Aite Group estimates that approximately 53% of all equities trading will be done through algorithmic trading.

Boston, MA, November 6, 2006 – Despite doubts, uncertainty, and misconceptions that are running rampant in the market, algorithmic trading continues to grow, according to a new Aite Group report. The adoption of first-generation algorithms appears to be nearing its end in the U.S. market. Instead, most brokers have moved on to develop more sophisticated algorithms that are capable of supporting portfolio trading, adapting to real-time changing market conditions, and seeking darks pools of liquidity.

This report provides an update on the state of the algorithmic trading market and focuses on identifying new market trends and highlighting market challenges. The report also provides an estimated adoption rate for algorithmic trading services in the U.S. securities industry.

According to Brad Bailey, a Senior Analyst at Aite Group and co-author of the report, "The role of the buy-side trader has become very complicated. There are so many routes to getting trades done and finding liquidity; the landscape for trading is evolving quickly, as are algorithms."

This 41-page Impact Report contains 21 Figures and 9 Tables. Clients of Aite Group's Retail and Institutional Securities & Investments Services can download the report by clicking on the icon to the right.

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