Real time quotes on securities are just what the name implies: the actual price of a security at that very instant in time.
They let investors or traders know the exact price for a stock they are trading at a moment-to-moment rate. Ticker tapes, and various trading platforms including Robinhood, display this real time information.
For traders capitalizing on quick moves in the market, real time quotes are essential. If information is delayed, this could lead to huge losses.
Here's everything you need to know about real time quotes on Robinhood.
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A quoted price is the most recent price at which a security is traded.
The quoted price of investments such as stocks, bonds and other commodities change constantly throughout the day.
This happens because of the many factors and events occur that affect the financial markets and the value of various investments. The quoted price represents the most recent bid and ask prices that buyers and sellers are looking for.
Day traders rely on instantaneous prices to make quick transactions.
Real-time quotes give these active traders 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.
For long-term investors, real time quotes are less important as the price may vary a little and the goal would be to hold for a long period of time. But for day traders and swing traders, the price is critical.
Delayed quotes are on the other end of the spectrum.
Unlike real time quotes, they lag behind the real time quotes by about 15 to 20 minutes.
Delayed quotes are usually good enough information for a casual investor who isn’t looking to time the market. Perhaps you’re a trader that has a long-term portfolio of stocks.
Since you don’t intend to sell immediately, you won't need up-to-the-second price information. Delayed quotes provide a general ballpark of where stocks and indexes are. They give an overall idea of whether they are trending up or down.
Robinhood does not charge its users for real time data.
They partner with Nasdaq to provide real-time last sale prices via Nasdaq Last Sale.
Nasdaq has more liquidity than any other U.S. exchange. Therefore, the Nasdaq is one of the most accurate sources for real time trade data.
You can find consolidated real-time market data by pressing “Market Price” on the Robinhood trade entry screen. (The trade entry screen is where you would buy a security. For example, if you wanted to buy a particular stock, you could type it in in the search bar. At the bottom of the screen, you could tap "Trade" and then "Buy." This would then open the Robinhood trade entry screen.) This consolidated real-time market data includes the last sale, best bid, and best ask price across all U.S exchanges. To get more detailed market data beyond the best bid and ask price, you would have to access Level II Market Data through Robinhood Gold (discussed below).
Each quote includes the price, quantity of shares, and the exchange on which it is available.
Real-time market data provides insightful information into the supply and demand for a stock just before you place a trade. The bid shows the highest price a buyer is willing to pay, the associated number of shares at that price, and the specific stock exchange that quote comes from.
There is, however, something called Level II market data which is only accessible via Robinhood Gold.
This is the paid service that costs $5 per month.
Level II market data provides investors with more information by showing multiple bid and ask prices for a stock, rather than lumping all of this data in together. Professional traders often use this information to make trading decisions.
However, regardless of if you are using Level II market data or the basic market data, both are in real time.
Robinhood is an investing platform that offers plenty of perks.
Among these are real-time price quotes. Day and active traders are more likely to need this instant information. More passive, longer-term investors can likely rely on delayed data.
If you want to see multiple bid/ask prices, consider Robinhood Gold which gives you access to Level II market data.
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