Understanding Delayed vs. Real-Time Stock Quotes
Stock quotes reflect the results of actual trading on stock market exchanges, such as the New York Stock Exchange or Nasdaq. As an investor, you can get quotes on the Dow Jones Industrial Average, other indices or individual stocks from any number of financial news sources, like Google Finance or Yahoo Finance. With the right source, you’ll be able to see real-time stock quotes right as they happen.
Some services don’t report real-time information and instead delay stock quotes for 15 or 20 minutes. If you’re a rapid trader, it can be critical to get real-time quotes instead of delayed quotes so you know exactly where the market is when you’re investing. Understand delayed and real-time stock quotes so you can know when to use each for your investing strategy.
Real-Time Stock Quotes
The stock market can be a volatile place; some actively traded stocks can fluctuate dramatically in price from minute to minute, or even from second to second. For investors looking to buy or sell a stock, knowing the current price is imperative. In a rapidly rising or falling market, also known as a fast market, even real-time quotes can have a hard time keeping up. In that market scenario, a quote that’s delayed 15 or 20 minutes is virtually useless, as a stock could have moved by a significant percentage in that time frame.
Delayed Stock Quotes
A delayed quote is usually enough information for a casual investor who isn’t looking to buy or sell a stock at that particular moment. For example, if you have a long-term portfolio of stocks you don’t intend to sell, you don’t need up-to-the-second price information. Delayed quotes will let you know the general ballpark of where your stocks or the Dow Jones are and whether they are trending up or down.
How to Get Real-Time Quotes
The main reason why some stock market quotes are delayed is money. Providing real-time quotes takes effort and technology; thus, this service has a cost. If firms don’t want to absorb this cost, they’ll only offer delayed quotes. Reuters, for example, provides lots of financial information, but its stock quotes are delayed at least 15 minutes.
As a result, firms often use real-time quotes as an incentive to get something in return from investors. For example, Fidelity offers free real-time quotes, but first, you must sign up for an online account and sign a subscriber agreement.
The good news for investors is that there are many ways to get free real-time quotes. For starters, Google Finance, Nasdaq and Yahoo Finance offer free real-time quotes. Financial broadcasts, such as those from CNBC and Bloomberg, are also shown in real time.
How to Tell the Difference Between Delayed and Real-Time Stock Quotes
When you get a quote, look at the page from which you’re getting your information. Most sites will list whether quotes are real-time or delayed — if they’re delayed, it will also include how many minutes it’s delayed by. Providing real-time quotes carries a cost, and sites that offer this service for free to investors usually advertise or prominently display that their quotes are real-time. Before you make an investment, you should try to access a real-time quote.
Most stock quotes provide just the price of the most recent trade. Some sites will list the current bid and ask prices. The best bid price is the highest price a market participant is willing to pay for a stock, whereas the best ask price is the lowest price at which an investor is willing to sell a stock.
For advanced traders, some firms offer Nasdaq Level II quotes, which show all the bid and ask prices rather than just the current best bid and ask. For the average investor, this is unnecessary information, but it’s available — usually at a cost — for more experienced traders.