It is very rare for the charts in any trading platform to match charts from other platforms or brokers. Hence, It is not an uncommon experience for the traders to find prices on one chart to look different when compared to other sources. This often puts a trader in a situation to raise questions like these- “Why does my U.S stock data seem incorrect? Why is my stock data delayed?”
The reason can be traced back to how the market data works. In this document, we will discuss the top four reasons behind this variation in the price across different sources.
Let’s get started 🚀
#1 Matching Buyers & Sellers
Trading is the process of matching buyers and sellers. This matchmaking happens simultaneously on numerous exchanges for the same stock at the same time. A buyer and seller can be matched on the NASDAQ exchange, creating one last price, while at the same time as another buyer and seller are matched for the same stock on the NYSE exchange, creating a slightly different last price. While the market is generally efficient at keeping prices very close to each other across various exchanges, there is no official or standard price for any particular asset at one time. It depends where the trade is executing, with whom, and on what network.
#2 Dark Pool Trades
The dark pool is an alternative trading system that observes the execution of confidential trades by the institutional investors outside the purview of the public exchanges like NYSE and NASDAQ and the general investing public. The dark pool trades are organized privately and hence, this trading data is not reported in the same way as normal trades and sometimes never makes its way out of the broker and is thus not reported to the exchanges. This leads to the “missing” trades and price action on other exchanges, creating price variations.
#3 Routing Orders
Trading activity that is routed to NYSE may not be immediately reported on other exchanges such as NASDAQ. Furthermore, it is important to note that brokers also buy the data from different sources, for example, Broker A might buy the data from NASDAQ, while Broker B might buy data from NYSE. As a result, what you’re looking at on your charts does not sketch the market as a whole on any platform or in any broker but just an abstract of it.
#4 Trades Within Same Brokerage
Within every brokerage, there are some trade actions that take place between the users of the same broker. For example, two users might take the opposite sides of the same trade where one buys and another one sells, a transaction that would never leave the broker and would generally not be reported to the exchange until settlement time.
As a result, if you will look exclusively at the New York Stock Exchange data, you will not be able to view the trades that happened on NASDAQ because they were never reported to NYSE. Some symbols like Amazon (AMZN) mostly trade over the NASDAQ and hence, NYSE data for these stocks will not look clear as data from NASDAQ might.
Market Data Delivery at TrendSpider
In terms of liquidity, the biggest financial securities market in the United States is NASDAQ. This is where TrendSpider sources US Equity and ETF Data from. NASDAQ data is delivered to TrendSpider via data pipelines provided by the Intercontinental Exchange (ICE) and then processed for use in the platform. This data is delivered in both historical and real-time form, and is used to power real-time updates to your charts, alerts, etc. Other types of data are collected from their respected sources. For details about data coverage, please visit https://trendspider.com/marketdata/