Many online trading platforms today feature all kinds of research capabilities and tools. At this point, the most useful information they provide investors is completely taken for granted.
One of the most important things for investors to have is current share prices. Accurate prices are necessary for both calculating the current value of a portfolio and for placing trades intelligently.
After all, buying and selling shares would be far more difficult without good price information. That was exactly the case in the early 1900s when prices were recorded on paper. The most recent prices available for the average investor back then were in the newspaper.
This information was often outdated before it was read which led to market inefficiency. People trading on Wall Street in New York had a big advantage over average investors. Luckily, the internet changed that in a big way.
Today, we have far more advanced systems that track price movements in milliseconds. Some professional-grade software are even able to track price changes in real-time for thousands of different tickers.
This software doesn’t come cheap though, so the vast majority of stock quote systems have a short delay of about 15 minutes from real-time prices. Companies can provide these delayed quotes very cheaply, which is part of the reason so many brokerages can operate without charging commissions today.
Like a lot of other online trading platforms, M1 Finance uses delayed quotes. This means that the prices you see are up to 15 minutes behind.
Any trades you enter will be executed at the current price, which may be slightly different than the price you saw.
M1 Finance does not currently offer a way to upgrade your quotes to real-time. Some other platforms like Robinhood offer this service for a monthly fee.
If M1 Finance uses delayed quotes, you may be wondering whether you need to switch to a provider with more current quotes.
For the typical investor, the answer is no. In most cases, prices won't be more than a few cents away from their real-time price quote. This works out to a very small difference in the total trade amount.
Furthermore, investors that are really concerned about trading at an exact price can use a limit order. A limit order is used to specify a maximum buy price or a minimum sale price.
For example, if you wanted to sell a share of XYZ company for at least $20.00, you could enter a limit order to do so. If the price moved below $20.00 before you submitted the trade, nothing would happen. Your brokerage would wait to sell the share until it is $20.00 or more.
The availability of limit orders greatly reduces the need for up-to-the-second stock prices.
So what kind of investor really needs such exact price information? Real-time price information only becomes necessary for people who are trading rapidly in and out of the market.
Commonly known as day traders, these people buy and sell securities very frequently, sometimes within minutes or seconds. They do this in an attempt to make small profits on a large volume of trades.
In order for their strategy to work, they need to be very careful about the prices they buy and sell at. Even a cent or two of difference can have a big impact on their profits. Being able to see prices in real-time makes the process a bit easier and gives the trader more control.
M1 Finance offers delayed price quotes to its users. These prices can be behind by up to 15 minutes at any given time. While a small subset of investors may need more professional tools, these quotes should do the trick for the majority of people. Stock prices usually don't move much in 15 minutes and limit orders can give investors more control over their trades.
For those interested in high-frequency trading, using a provider with real-time quotes may be the best option.
M1 Finance is an online brokerage platform that charges no trade commissions or fees and has an account minimum of just $100.
Catering to investors with less capital, M1 Finance offers fractional share investing which means you can buy and sell as little as 1/100,000th of a share.
In addition, the platform offers a wealth of automation features which makes investing easier and less time-consuming. Users can set up an automatic investment schedule and can even use dynamic rebalancing to keep their portfolios on track.
M1 Finance investors can also choose to invest in over 80 different "expert portfolios" that have been pre-designed by professionals.
Visit the M1 Finance website for more information.