Real-Time Quote (RTQ)

Real-Time Quote (RTQ)

Table of Contents What Is a Real-Time Quote (RTQ)? Understanding a Real-Time Quote How a Real-Time Quote Works Delayed quotes, unlike real-time quotes, may lag the real trading market by between 15 and 20 minutes. Real-time quotes show the instantaneous price and volume for a security, including the best bid and ask, versus a delayed quote — which has a 15-20 minute lag. Real-time quotes let investors or traders know the exact price for a stock they are trading at a moment-to-moment rate. In a rapidly rising, or falling market, also known as a fast market, even real-time quotes can have a hard time keeping up.

Real-time quotes show the instantaneous price and volume for a security, including the best bid and ask, versus a delayed quote — which has a 15-20 minute lag.

What Is a Real-Time Quote (RTQ)?

A real-time quote (RTQs) is the display of the actual price of a security at that very moment in time. Quotes are the price of a stock or security displayed on various websites and ticker tapes. In most cases, these figures are not real-time numbers of where the securities are trading but are delayed quotes. Delayed quotes, unlike real-time quotes, may lag the real trading market by between 15 and 20 minutes. Real-time quotes are instantaneous with no delay.

Real-time quotes show the instantaneous price and volume for a security, including the best bid and ask, versus a delayed quote — which has a 15-20 minute lag.
Real-time quotes used to be a costly service but now are increasingly offered for free via online brokerage platforms.
Real-time quotes are most often used by day and high-frequency traders.

Understanding a Real-Time Quote

Real-time stock quotes, sometimes known as quote streaming services, are increasingly offered as a free add-on with many web-based financial sites and online brokerages. However, some providers will still charge an additional fee to gain access to them. Also, real-time pricing information for options and other securities may incur additional fees, as they are intended primarily for professional traders and firms.

How a Real-Time Quote Works

A standard quote on any security consists of a bid price and an ask or offer price and is a two-way pricing structure. In this structure, the bid price is the most any buyer is willing to pay for the share or the security.

Conversely, the asking price is the least amount the seller is willing to take for the share. The bidding price is what the sellers would receive for the security, and the asking (offer) price is what buyers must pay for the security. For example, the quote for a share of XYZ may appear as $23.25 to $23.30.

In this case, the most the buyer will pay is $23.25, and the least the seller will accept is $23.30. Further, the more volume that trades on a particular security will bring the bid and ask prices closer together.

Special Considerations

Historically, price quotes arrived via ticker tape which relied on telegraph technology. Over time, quotes began to be disseminated daily in newspapers and during television broadcasts. Brokerage customers who wanted a stock quote would rely on telephones where a broker would physically call down to a stock exchange and request a quote. With the rise of Internet-based online trading, the cost of providing real-time quotes dropped significantly and soon became ubiquitous as of the early 2010s.

Stock exchanges provide quotes to the public which vary with the amount of information available. Traders and investors using electronic trading methods may receive Level I, II, or III quotes. As the quotes move upward in level, more information is provided. However additional information will come at an additional cost.

Providing real-time quotes takes effort and technology and as such, costs more. If firms do not want to absorb this cost, they will only offer delayed quotes. Reuters, for example, provides quite a bit of financial information, but its stock quotes lag the market by 10 to 20 minutes as of 2021. Financial news services often offer real-time quotes as a premium subscription service.

Unless you're a day trader or high-frequency trader, delayed quotes are usually sufficient for monitoring a portfolio or placing an order for a stock you plan to hold for the long-term.

Advantages and Disadvantages of Real-Time Quotes

Real-time quotes let investors or traders know the exact price for a stock they are trading at a moment-to-moment rate. In this way, they may have a far better idea of the price they will pay when having their order filled. If they base their cost on a delayed quote, they could find they significantly overpaid or luckily underpaid for the shares.

In a rapidly rising, or falling market, also known as a fast market, even real-time quotes can have a hard time keeping up. In that market scenario, a quote delayed by between 15 and 20 minutes is virtually useless, as a stock could have moved by a significant percentage in that time frame.

Delayed quotes are usually enough information for a casual investor who isn’t looking to time the market. For example, if a trader has a long-term portfolio of stocks and they don’t intend to sell immediately, they won't need up-to-the-second price information. Delayed quotes provide a general ballpark of where stocks and indexes are, and whether they are trending up or down.

But with the advent of ultra-fast high-frequency trading (HFT), the need for precise real-time price data is increasingly vital for the people who trade using this method. These traders rely on algorithms to the order of milliseconds. They use sophisticated communications technologies such as fiber-optics, millimeter-wave microwave transmission, and exchange co-location techniques to obtain ultra-real time information as well as send orders which can process immediately in the market.

Related terms:

Ask

The ask is the price a seller is willing to accept for a security in the lexicon of finance. read more

Bid Price

Bid price is the price a buyer is willing to pay for a security.  read more

Fast Market

A fast market is a condition officially declared by a stock exchange during unusually high levels of volatility, combined with unusually heavy trading. read more

High-Frequency Trading (HFT)

High-frequency trading (HFT) uses powerful computer programs to transact a large number of orders in fractions of a second. read more

High-Speed Data Feed

A high-speed data feed transmits data such as price quotes and yields in real-time without delays, and is used in high-frequency trading. read more

Level 1

Level 1 is a type of trading screen used in stock trading that displays the best bid-offer-volume quotes in real-time. read more

Level III Quote

Level III is a trading service that provides real-time, in-depth pricing information about securities. read more

National Best Bid and Offer (NBBO)

The National Best Bid and Offer (NBBO) is the best bid and offer price for a security aggregated from among all exchanges in the country. read more

Quote

A quote is a price determined at a specific instance of time for a security traded on the market. read more

Real Time

Real time is when a system relays information to a user at a speed that is near-instantaneous or has a short delay from when the event actually occurred. read more