In finance, market data is price and trade-related data for a financial instrument reported by a trading venue such as a stock exchange. It gives traders and investors the right to know the latest price and see historical trends for instruments such as equities, fixed-income products, derivatives and currencies. It may also include other information such as volume traded, bid and offer sizes and static data about the financial instrument that may have come from a variety of sources.
There are numerous financial data vendors that specialize into collecting, cleaning, collating and distributing market data and this has been widely considered the most common way that traders and investors get access to market data, especially real time market data.
The delivery of market data from exchanges to users, such as traders, is highly time-sensitive and specialized technologies designed to handle collection and throughput of massive data streams are used to distribute the information to traders and investors.
However, the speed that real time market data is distributed can become very critical that in trading systems, analyzing the data before others are able too may result to high frequency trading.
It is a challenge for any finance expert to deal market data in a timely manner, it is best that this must be taken into consideration in a justifiable span of time. Market price data is not only used in real time or in a timely manner to make on-the-spot decisions about buying or selling, but historical market data, it is primarily used to project pricing trends and to calculate market risk on portfolios of investments that an individual or an institutional investor may have.
Professional real time market data delivers market quotes directly from exchanges with minimum delay. A real time market data must give proprietary analytics to banks, corporations, financial institutions and individual traders, feeds on equities and derivatives from exchanges around the globe with professional quality.
Real time market data is expensive so it needs to be managed professionally. Market data management deals with the following:
- Change management
- Contract management
- Cost management
- Demand management
- Inventory management
- Invoice Reconciliation & Administration
- Technology management
- Vendor management