Choosing An Exchange For Real-Time Stock Prices

Andrew Carpenter
September 1, 2021

If you need real-time stock prices, one of the first (and largest) challenges you’ll face is choosing the right exchange. This article will help you understand the differences between larger and smaller exchanges and help you choose the right exchange for your data needs.

Why are stock prices different across exchanges?

Stock prices are set by stock exchanges where stock owners put their stock up for sale and those that wish to buy stock place bids. The "ask price" is the most recent sale price offered by stock owners, and the "bid price" is the most recent offered price by stock buyers.

The difference between these numbers is called the spread. Stock exchanges match buyers and sellers - each time they do, a sale occurs. The price of that sale is generally between the bid and ask prices and is called the "last sale." Each time a sale occurs, the price of the stock is set anew. This last sale represents the stock price on that exchange. The last sale is also called the "last price."

The reason there isn't a single stock price is that this process of matching buyers and sellers is happening on numerous exchanges for the same stock. A buyer and seller can be matched on the Nasdaq exchange, creating one last price, at the same time as another buyer and seller are matched for the same stock on the IEX exchange, creating a second last price. Meanwhile, BATS, NYSE, and other exchanges are also trading the stock, generating still more last prices.

This process means that, at any given moment, there are several "stock prices" for the same stock.

How do stock prices converge?

Stock prices tend to converge across exchanges because buyers and sellers of stocks can place their orders on any exchange. If the price of a stock is higher on one exchange, sellers will gravitate to it. That extra supply will lower the price. Similarly, buyers won't pay a premium if the price gets too high on one exchange; they will migrate to another exchange.

This process is less apparent to individual investors, but bigger trading firms have a fiduciary responsibility to get the best deals for their clients. The result is that while there are many stock prices on many exchanges, over many trades, the prices tend to become very similar across exchanges.

The degree of similarity between exchanges has a lot to do with trade volume. The higher the "liquidity" of a stock on an exchange, the less likely that stock is to have a large variance from other exchanges. In other words, the longer it takes for a buyer and seller to be matched, the more drift can occur between the most recent last sale price and the "stock price" on a different exchange.

What are your options for real-time stock prices?

Both retail and professional traders watch stock prices closely. If you want to increase engagement on your platform or website by displaying real-time stock prices, you have three main options.

Consolidated Tape Provider

A consolidated tape feed pulls stock prices from all stock exchanges across the US and combines them. Since there are more than a dozen stock exchanges currently operating in the US (such as Nasdaq, NYSE, IEX, MEMEX, etc.), the consolidated tape is the gold standard for stock prices.

The consolidated tape gives you the National Best Bid and Offer (NBBO), which includes the best bid (the highest price someone is willing to pay for a stock) and the best offer (the lowest price someone is willing to sell the stock for) across all the exchanges.  

The problem with getting the “gold standard” of anything is that it’s very expensive. There are only a handful of providers that consolidate all of the exchanges, and those providers charge large fees for you to access the data. Between exchange fees, vendor fees, and per-user fees, you could be looking at six figures or higher annually, depending on your platform.  

Per-user fees mean that every time you show data to a user, you have to track it and pay a fee. If you have a lot of users, this can add up quickly. It’s also time-consuming for your team because you have to build an internal system to track your users. Additionally, you may have to pay your data provider to set up a server and connect you to the data.

If you’re executing trades – for example, if you operate a brokerage – you’re required by the SEC to show the NBBO from the consolidated tape to your users. Most other companies, such as investment advisory platforms, don’t need the NBBO and can dramatically lower their costs with one of the other options.

Single Large Exchange

The biggest players in the industry are Nasdaq, CBOE 1, and NYSE. Those three exchanges account for roughly 60% of all trades and are very high quality due to their trading volume. (Quality is defined, in this instance, as the amount of drift from the NBBO in the consolidated tape.)

These feeds do have drift – there are moments throughout the day when trades happen at different levels. Depending on your platform, that might be fine for your users. It’s unlikely they will notice a half-percent difference if they’re manually reviewing the stock price (as opposed to using an algorithm or other automated system). These larger exchanges have so much volume that they regularly converge around the same price.

The downside is that you’re still going to have high exchange fees, into the thousands of dollars a month. You’ll also have some or all of the per-user and connectivity fees mentioned earlier. However, if you have the budget and aren’t mandated to use the consolidated tape, this is an excellent option.

Single Small Exchange

Your final option is to get stock prices from a single lower-volume exchange, such as IEX or MEMEX. These exchanges make up anywhere from <1% to 3% of the total market volume. If your platform is primarily focused on large-cap stocks that are traded frequently (like AAPL and TSLA), most of your users won’t notice the difference between prices from big and small exchanges. Drift from the NBBO will be more noticeable with small or micro-cap stocks.

The bonus of these smaller exchanges is that they often have no exchange, per-user, or connectivity fees. Fees vary by exchange, so it helps to work with a partner who has experience with each exchange.

Of course, you get what you pay for. While you’re saving big on overhead, your users might notice that the prices you’re displaying don’t match what they see on other exchanges. Our best advice is to start with a small exchange while you get up and running and conduct your user testing. As your budget grows and your users start to expect higher-quality data, you can upgrade to the larger exchanges or the consolidated tape.

Businesses tend not to choose this option because transitioning your platform from one provider or exchange to another can be difficult. There’s a ton of paperwork to submit, and you don’t want to end up on the wrong side of regulators or the exchanges. This is where working with a partner like Intrinio can really help – we help you get set up at the lowest possible cost for your needs, and then help you navigate the switch to larger exchanges as you grow.

What else do you need to know?

Picking an exchange is only half the battle. As we’ve touched on, you’ll also need to consider:

  • How are you going to connect to the exchange? Are you going to physically set up a server near the exchange and pay someone to maintain it, or work with a third-party vendor that already has the infrastructure?
  • How are you going to retrieve the data? There is a huge variety of access methods – most of our clients connect over Web API to request updates as needed, or WebSocket to stream prices continuously.
  • What paperwork do you need to submit? Each exchange has different paperwork and different departments that you’ll need to contact. You’ll also need to figure out if you’re required to report users, how often you need to report them, and how you pay for each user.

We know – it's a lot. Intrinio has helped thousands of customers navigate working with exchanges so they can skip the headache and focus on growing their companies. If you want to tap into our expertise to make your data journey easier, visit

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