A Comprehensive Guide to Delayed Data
Some market data vendors offer delayed data, which can be a valuable tool for investment analysis. However, it’s essential to understand that delayed data is not real-time data, and there are some things you should keep in mind when using it. In this blog post, we’ll discuss what delayed market data is, how it’s used, and some potential pitfalls to be aware of.
What is delayed data?
Delayed data is market data that is not delivered in real-time. Typically, delayed data is about 15 minutes behind the current market price. So, if you’re looking at a stock chart and the current price is $100, the delayed data will show the stock price as $85.
There are a few reasons why vendors offer delayed data:
- To comply with regulations: In some countries, regulators impose delays to level the playing field between retail investors and professional traders with real-time data access.
- To reduce costs: Delaying data can be cheaper for vendors because they don’t have to invest in the infrastructure to provide real-time data.
- To increase market liquidity: By delaying the data, vendors can encourage more trading activity because investors will feel they have more time to make decisions.
- To reduce risk: Delaying data can help vendors avoid liability if an investor loses money due to acting on inaccurate information.
How is delayed data used?
Delayed data is often used by individual investors who don’t have access to real-time data. For example, delayed data can be a helpful tool if you’re trying to research a stock before you buy it.
However, there are some potential risks to using delayed data:
- Delayed data is not real-time data: The stock price can move significantly between the time you see the delayed data and the time you make your trade.
- Delayed data can be misleading: Because it’s not real-time, delayed data doesn’t necessarily reflect the actual state of the market. For example, if there’s a sudden drop in the stock price, you may not see it reflected in the delayed data for several minutes.
- Delayed data can be manipulated: Traders can manipulate delayed data because it’s not real-time. For example, they could place trades they know will move the stock price and cancel them before the delayed data is updated.
If you’re considering using delayed data, it’s essential to be aware of these risks. You may want to use real-time data instead or supplement your research with other information sources.