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What is Market Data?
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. Traders and the investors are able to know about the latest prices through this data. The latest market trends and the historical trends for the instruments is among the thing they are able to see. These instruments include equities, fixed income products and currencies. Market data can also be explained in other ways. The electronic streaming of prices and volumes is what it is.
Majority of the market data emanates from 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. It is through this means that the management of the financial assets becomes possible. Among the information included in the market data is that which is gathered and distributed through the various key indexes.
Reporting of market data is usually done in the various assts. 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. It enables the traders to make timely and informed decisions. The historical information availed is key in the planning of future trades.
For a particular instrument the market data includes different things. It includes the identifier of the instrument and where it was traded. Included in the identifier are the ticker symbol and the exchange codes. The data includes information such as the volume traded, bid and offer sizes and the static 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
There are two main categories of market data. Basic trading information is provided to the investor in the first category. The lowest ask and highest bid prices is included in the information. This information is required in telling the best bid offer data. Information on the most attractive security in the market is offered by the other category. Keeping track of moving securities information to the investors is provided. Volume based trading systems and the information on the trading systems is provided.
The market data information is used in the real time. Here it makes on-the spot decisions about the buying or selling. To project pricing trends the information is also used in the historical manner. Calculation of the market risk on the portfolio used the historical information that is provided. These investments may either be held by individuals or by institutional investors.