Real-Time Quote
Categories: Trading
The term is a bit of a relic from the Olde Worlde, when the internet wasn't really a Thing. Stock and bond quotes were considered "content," and only professionals cared to have real time quotes, i.e. prices sent directly from the floor of whatever exchange in which those securities were being traded. So the pros would be charged a meaningful fee, like $100 a day or something like that, for the privilege of getting those quotes right away, stat. The retail buyer was less interested...and likely couldn't afford "real time," so they received quotes that were about 20 minutes delayed.
Things changed dramatically with robotic or programmatic trading. Trades timed to the nanosecond changed the way spreads worked, and all kinds of extremely short duration arbitrage opportunities existed when massive volume could be traded quickly to take advantage of a hundredth of a cent difference in prices on different exchanges. And brokers loved it: More volume = more commish.
See: Fast Market Rule.
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Finance: What is the Fast Market Rule?11 Views
Finance a la shmoop what is the fast market rule? okay things get crazy here [Two guys riding a rollercoaster]
whoa and every now and then there's a leap well blimey, that's how things work
here on the London Stock Exchange.....
the fast market rule accommodates the chaos by giving brokers and other market
makers the freedom to trade outside the ranges published to the exchange why is
this needed? well because we live in a world of robots and artificial
intelligence and fat thumbs that hit the wrong keys and hackers from Russia China
and Mars all of whom can profit from chaotic disruption if you want to see
this phenomenon in its finest form well check out Jack Nicholson in the original [Man stood next to Jack Nicholson as Joker]
Batman movie and that was the best one so the logic revolves around the fact
that today even with all our massive computing power we would still rather
rely on human beings when you know the congressman hits the fan then assume
that a computer will be clever enough to figure out what's wrong quickly you know
when the world is on a collision course with chaos all over the place fast [Meteor strikes Earth]
market rule, humans over robots...