What Market Data Means
For any financial instrument the market data refers to the price and trade related data. In trade venue such as the stock exchange this data is reported. Through the market data, the latest prices are made known to the traders and the investor. Historical trends of the instruments and the latest market trends are also known. Equities, fixed income products and currencies are the examples of the instruments. Market data can also be explained in other ways. It is the related information to the electronic streaming of prices and volumes.
Emanation of the majority of the market data is the trading venues. Reference data on the other hand comes from the issuers and is mainly collected by the market data vendors. Traders and vendor are provided by the market data the foundation of performing various transactions. Through this they are also able to manage various financial assets. Market data therefore includes that information which is gathered and distributed through the various key indexes.
Various assets are used in reporting market data. Trading companies report the market data on other financial instruments. Through this data the traders can tell the worth of various assets. On how to make profits good strategies can therefore be laid. It is very important to deliver real-time market data. Decisions which are timely as well as informed can be made by the traders. The historical information availed is key in the planning of future trades.
Different things are included for a particular instrument in the market data. It includes the identifier of the instrument and where it was traded. These identifiers includes the ticker symbol and the exchange code. Volume traded, bid and offer sizes and the static data are the information included in the data. There are those who do the collection cleaning, collating and distributing market data in many places. Financial data vendors is what they are called. 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. This information is required in telling the best bid offer data. The most attractive security in the market’s information is offered by other category. It provides the investors with information to keep track of the moving securities. Volume based trading systems and the information on the trading systems is provided.
Information of market data is used in the real time. The buying and selling spot decisions are made therefore. The information is also used historical so as to project pricing trends. Historically the information can also be used in the calculation of market risk on portfolios of investments. These investments may either be held by individuals or by institutional investors.