New York Stock Exchange
stock market are planning to offer real-time quotations on their Web sites, positioning themselves as new competitors in a business where they now act exclusively as wholesalers.
The New York Stock Exchange announced Wednesday that it would provide free real-time stock quotes on its Web site beginning later this summer.
Nasdaq, meanwhile, is completing its testing of a similar service and will soon announce free real-time stock quotes are available on its Web site, a Nasdaq official said Wednesday. The official, who spoke on the condition of anonymity, said Nasdaq had been "working on it for months."
Currently, the Big Board and Nasdaq sell immediate price information to retailers, including brokers and financial Web sites. The same data will become available at
later this summer, the New York Stock Exchange said.
The two markets must buy the data from the
Consolidated Tape Association
, a trade group comprising themselves, the
American Stock Exchange
and regional exchanges, said Ray Pellecchia, a NYSE spokesman. Pellecchia was unsure what that will cost.
While the announcement would seemingly eliminate the value of real-time quotes to the exchanges' current customers, analysts said that portends no immediate threat to online brokers.
"Eventually, a lot of the content is going to be free anyway," said Alan Weichselbaum, an analyst at
Gerard Klauer Mattison
. If the exchanges also offer trading systems of their own, "then you've got a problem, and what are these other companies going to do?"
The NYSE will deliver consolidated quote data, not just prices for equities listed on its own exchange, Pellecchia said. The Nasdaq official said that exchange also plans to offer quotes from the NYSE, Nasdaq and American Stock Exchange. The
National Association of Securities Dealers
, or NASD, owns Nasdaq and the American Stock Exchange. Quotes are bid and offer prices, as opposed to tape, the listing of final prices.
"We already provide a wide array of tools on the
site," the Nasdaq official said. Asked whether Nasdaq plans to compete directly with online brokers, the official said, "Oh, no, we don't want to get into the credit business."
If the NYSE delivered only its own data, "I would just look at it as an extension of their Web site capabilities," said Russell Keene, an analyst for
Keefe, Bruyette & Woods
. But offering the consolidated data raises new questions about ownership and rights and would seem to position the exchange against some of its customers, he said. "I think they would have a lot of calls," he added. (Keene and Weichselbaum both cover online brokerage firms.)
Asked whether the NYSE has received calls from worried customers-cum-competitors in the real-time quote business, Pellecchia said: "We just put out the announcement now, so the answer is no."
Currently, the NYSE charges professional subscribers three-quarters of a cent for each stock quote up to 20 million, and the price drops as more quotes are viewed.
According to the
Securities and Exchange Commission
, which is examining whether the fees charged by the exchanges for real-time quotes are fair to investors, those fees have been reduced from 50% to 85% in the last year, prompted by investor demand and improved technology.
In 1998, the most recent year in which figures are available, the NYSE generated revenue of $112 million from real-time quotes. Overall, real-time quotes produced $410.6 million in fees for the various stock markets in 1998, according to the SEC.
Real-time quotes are available elsewhere online.
a unit of
has offered free real-time quotes since 1997 and says it has about 500,000 customers.
"The Web sites that offer the most products and meet the customers' needs are the ones that are going to survive," Weichselbaum said.
Keene noted that more widespread availability of real-time quotes could improve the accuracy of trade execution at online brokerages.