Personal Finance & Money Asked on October 4, 2021
Currently (April 2021), it is easy to obtain the best bid and offer (NBBO) of a stock for free. One just has to use a mainstream financial website such as Yahoo Finance or even Google, and one can easily see the Level 1 quotes for free. From my understanding, these websites are able to provide the quotes for free because the data (indirectly) comes from Securities Information Processors (SIPs), which is one of the cheapest official sources of stock quotes. However, market depth data (i.e. other bids below the highest bid, and other offers above the lowest offer) is not available through SIPs, and that is probably why free websites do not provide market depth data for free.
I have recently come across some interesting documents from the SEC about SIP reform:
Statement on Market Data Infrastructure by Commissioner Caroline A. Crenshaw
Related publication in the Federal Register: Market Data Infrastructure
From my (poor) understanding of these documents, it appears that SIPs will start to disseminate a limited amount of market depth data sometime in the future. Quoting from the press release:
New “depth of book data” will include quotation sizes at each national securities exchange and on a facility of a national securities association at each of the next five prices at which there is a bid that is lower than the NBB and offer that is higher than the NBO.
My questions:
Forgive me if the answers are obvious. I do not possess enough knowledge to understand the financial and legal terminologies in the ~900 page SEC report.
Get help from others!
Recent Answers
Recent Questions
© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP