how a real time quote works
a standard quote on any security consists of a bid price and an ask or offer price and is a two way pricing structure in this structure the bid price is the most any buyer is willing to pay for the share or the security conversely the asking price is the least amount the seller is willing to take for the share the bidding price is what the sellers would receive for the security and the asking offer price is what buyers must pay for the security for example the quote for a share of xyz may appear as 23 25 to 23 30 in this case the most the buyer will pay is 23 25 and the least the seller will accept is 23 30 further the more volume that trades on a particular security will bring the bid and ask prices closer together special considerationshistorically price quotes arrived via ticker tape which relied on telegraph technology over time quotes began to be disseminated daily in newspapers and during television broadcasts brokerage customers who wanted a stock quote would rely on telephones where a broker would physically call down to a stock exchange and request a quote with the rise of internet based online trading the cost of providing real time quotes dropped significantly and soon became ubiquitous as of the early 2010s stock exchanges provide quotes to the public which vary with the amount of information available traders and investors using electronic trading methods may receive level i ii or iii quotes as the quotes move upward in level more information is provided however additional information will come at an additional cost providing real time quotes takes effort and technology and as such costs more if firms do not want to absorb this cost they will only offer delayed quotes reuters for example provides quite a bit of financial information but its stock quotes lag the market by 10 to 20 minutes as of 2021 1 financial news services often offer real time quotes as a premium subscription service unless you re a day trader or high frequency trader delayed quotes are usually sufficient for monitoring a portfolio or placing an order for a stock you plan to hold for the long term advantages and disadvantages of real time quotesreal time quotes let investors or traders know the exact price for a stock they are trading at a moment to moment rate in this way they may have a far better idea of 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 in a rapidly rising or falling market also known as a fast market even real time quotes can have a hard time keeping up in that market scenario a quote delayed by between 15 and 20 minutes is virtually useless as a stock could have moved by a significant percentage in that time frame delayed quotes are usually enough information for a casual investor who isn t looking to time the market for example if a trader has a long term portfolio of stocks and they don t intend to sell immediately they won t need up to the second price information delayed quotes provide a general ballpark of where stocks and indexes are and whether they are trending up or down but with the advent of ultra fast high frequency trading hft the need for precise real time price data is increasingly vital for the people who trade using this method these traders rely on algorithms to the order of milliseconds they use sophisticated communications technologies such as fiber optics millimeter wave microwave transmission and exchange co location techniques to obtain ultra real time information as well as send orders which can process immediately in the market 