Afinancial data vendor providesmarket data to financial firms, traders, and investors. The data distributed is collected from sources such asstock exchange feeds,brokers and dealer desks or regulatory filings (e.g. anSEC filing).
Financial data vendors have been in existence as long as financial data has been available. The first technology that allowed data vendors to disseminate was theticker tape starting in the 1870s. Financial data includes "pre-trade" such as bid-ask data necessary to price afinancial instrument and post-trade data such as the last trade price and othertransaction data.
From ticker tape to television cameras, from databases to websites this multibillion-dollar industry provides data utilized in the financial sector. Paper ticker tape became obsolete in the 1960s, as television and computers were increasingly used to transmit financial information. The concept of the stock ticker lives on, however, in thescrolling electronic tickers seen on brokerage walls and on news and financial television channels.
Because the financial investment needed to provide the services needed, the industry had become ever more consolidated, but in 2004 it was forecast that the industry was beginning to fragment.[1]
According to the 2009 Burton-Taylor report, the Market Data industry exited 2009 at US$22.68 billion after closing 2008 at US$23.01 billion. In 2009, Thomson Reuters and Bloomberg market share were virtually even, at 29.4% and 29.2% respectively.
As of 2008, the largest four financial data vendors capture the $15.222 billion in annual revenues[2][3][4] and employ tens of thousands of people.[5][6][7]
There are many different types of instruments (including stocks, bonds, funds, options, futures, currencies, etc.) and hundreds of differentmarkets for investment, leading to an extremely large and hard to define universe of data.[8]
The types of data offered vary by vendor, and most typically cover information about entities (companies) and instruments (shares,bonds etc.) which companies might issue. Typically, pricing data is sold separately from other related data, such ascorporate actions and events,valuation information,fundamental data including company performance andreference data on the entities and instruments themselves.
In addition tomarket price data there are data known asmarket reference data, such as a ticker name, which describe securities, commodities and transactions.
Intraday data[9] is any data that is released within the same day or trading session.
The majority of financial data vendors can access data during trading sessions but with the requirement that any inquiry be in reference to historical market analysis.[10] Analysis of historical market data provides a larger snapshot of the market at the expense of timely information (time inbetween database updates).
Alternative data (finance) vendors offer non-traditional datasets, typically defined as those that do not originate from securities exchanges, regulatory disclosures, or economic release indicators. These are used by quantitative and fundamental investors to enhance portfolio returns. Examples include consumer transaction data, satellite imagery, vehicle movements, and web data, including social media data. With an estimated three out of four financial institutions housing alt-data teams as of 2020, and 90% of firms expanding their alt-data strategy, alternative data is now arguably mainstream.[11]
Most of the market differentiation between competitors is based on some combination of the following:
The following are some notable financial data vendors that distribute data from multiple exchanges:[12][13]