Understanding Market Data
For any financial instrument the market data refers to the price and trade related data. A trading venue reports this data through the stock exchange. Through the market data, traders and investors are able to know the latest prices. The latest market trends and the historical trends for the instruments is among the thing they are able to see. The instruments refers to the equities, fixed income products and currencies. Market data has other definitions. It refers to the electronic streaming of prices, volumes as well as the related information used.
Emanation of the majority of the market data is the trading venues. Market data vendors collect the reference data which comes from the issuers. A foundation for performing various transactions for trader and vendors is provided by the market data. It is through this means that the management of the financial assets becomes possible. That information which is gathered and distributed through the various indexes is included in the market data.
Various assets are used in reporting market data. Trading companies report the market data on other financial instruments. The traders can tell the worth of various assets through this data. They can also lay good strategies on how to make a profit. The delivery of real time market data is very important. Decisions which are timely as well as informed can be made by the traders. The availed historical information is key in the future trades planning.
Market data for a particular instrument includes different things. Where a particular instrument was traded includes the identifiers. The ticker symbol and the exchange code are included in the identifier. The information included in the data are the volume traded, bid and offer sizes and the static data. There are those who do the collection cleaning, collating and distributing market data in many places. They are known as financial data vendors. The most common way in which vendors access data is this way
Classification of market data is in two main categories. Basic trading information is provided to the investor in the first category. What is included in the information is the lowest ask and highest bid prices. The best bid offer data is provided in the information which is required. The most attractive security in the market’s information is offered by other category. Information that enhances keeping track of the moving securities is provided to the investors. Also provided is the information on trading systems and the volume based trading platforms.
Information of market data is used in the real time. Here it makes on-the spot decisions about the buying or selling. The information is also used historical so as to project pricing trends. Calculation of the market risk on the portfolio used the historical information that is provided. Holding of the investments may however be done by the individuals as well as the institutional investments.