[ A L G O R I T H M I C T R A D I N G S U R V E Y ]
Figure 4: Number of providers used(% of responses)
41 %
11 %
9 %
33 %
6 %
up to 2024 show that this group consistently averaged two providers per firm. In fact, even with the dramatic drop in 2025, this group still has a historically abnormal high average of four providers per firm. As mentioned above, the largest year-over-year increase in the number of algo providers used came from firms in the $ 10 billion to $ 50 billion AUM band, which reported an increase of 0.84 algo providers, bringing their average to 5.21. This was followed by an increase of 0.52 providers by firms in the $ 1 billion to $ 10 billion in AUM range, which are sitting at nearly five providers per firm( 4.63). While we have seen some exceptions over the past few years in specific AUM bands, for the most part, the average number of providers has remained largely unchanged, a trend that should continue, given growing complexity and volatility in financial instruments and market conditions. In addition, as buy-side firms continue to adopt algorithmic trading tools provided by global banks in the fixed income and FX markets to better manage
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their risk, there is a greater chance that the average number of providers used will increase even more, especially for globally focused hedge funds. When analysing the average number of providers used by hedge fund managers, there is a clear bifurcation between those that use five or more providers( 41.33 %) versus firms just leveraging a single provider( 32.67 %) as shown in Figure 4. As noted in our AUM-based analysis, the latter tends to be dominated by smaller AUM firms whereas the larger firms will tend to utilise multiple providers. More broadly speaking, usage of multiple providers is still the market norm, with close to 70 % of hedge fund managers leveraging more than one provider to meet their trading needs.
Use of algorithms by value traded Analysing the usage of algorithms by value traded, the results were clearly skewed towards aggressive adoption of algos, with approximately 63 % of the respondents indicating they use algos to trade more than half of their value( Figure 5). This is an increase from last year, when 59 % of respondents said they traded much of their value via algorithms.
The largest increase occurred with those respondents trading more than 80 % of value with an impressive year-over-year growth of 4 %, sitting now at 32.67 %, indicating that nearly one third of respondents currently leverage algos to trade much of their value, validating the overall effectiveness of algos as an essential part of their trading activities. On the other hand, those respondents trading 10 % to 20 % of value showed the steepest decline at-4.00.
Diversity in types of algorithms used Examining the types of algorithms that hedge fund managers use the most, VWAP, dark liquidity seeking and % volume emerged as the top three strategies( Figure 6). The biggest increase occurred in % volume, presenting a strong year-overyear 4.67 % increase, reaching nearly 67 %. This increase could be attributed to the trader’ s increasing need to reduce market footprint while navigating through market volatility.
On the other hand, dark liquidity seeking and target close / auction algos recorded the biggest decline at-6 %. Dark liquidity seeking usage has dropped for the second consecutive year, from a peak of 84.52 % in 2023 to 68 % in 2025. Despite the huge decline from the previous years, dark liquidity seeking represents the second most used algorithm and remains a favorite tool for those hedge fund managers seeking liquidity beyond the lit markets. There might be a few good reasons
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