Think about a hungry baby at dinnertime. That gives you a hint about how online investors feel about real-time quotes. They want it
Online Broker Survey 2000
, real-time quotes were the second-most important feature to investors after reliability. The numbers speak for themselves: 80% of daytraders regard real-time quotes as "vital," as do 76% of active investors. Even other
types of investors, such as buy-and-holders, place a premium on real-time quotes: 53% regard them as vital.
Here's the kind of quote-junkie that online brokers just have to please: "While
advertises the availability of real-time quotes and options trading, in fact it does not provide online real-time quotes on any equity option contract with open interest of less than 100 contracts," wrote Stephen Mintz. "This means that for a quote on an equity option contract with open interest of 100 you must call one of their traders, which often means hold times of 10 minutes or more."
Obviously he's an extreme customer, but consumer expectations have notched up a bit since the advent of online trading a few years ago. (DLJDirect says it is working with its vendors to remedy the problem and that it now has real-time quotes for these types of contracts.)
"Real-time streaming quotes are practically a necessity for a trader who really wants to make some profits," respondent Eric Belko wrote. "The capability to efficiently and quickly execute a transaction for the best price is a measure of the worth of the online broker." Adds another reader: "Real-time streaming stock and option data should be standard at online brokers. Trading is a pain without it!!"
, which customers ranked as No. 1 in the real-time quotes category, does appear to offer the most extensive service. In October, the Iselin, N.J., company began offering free, unlimited stock quotes to all "registered" users. That's not just investors with accounts at Datek. It's customer who forks over demographic information to Datek.
Datek's "streamer" system allows users to customize as many as nine portfolios with 10 stocks each -- including picking their own color scheme -- that are updated in real time "without hitting the refresh button," boasted Datek spokesman Brian Dorf.
Some readers were equally effusive: "I LOVE Datek's real-time streaming quotes!," said one.
Datek account holders do get extra. They can have as many as 20 stocks in each list vs. the 10 available for registered users.
Other brokers, such as
, also highly ranked, provide real-time quotes only to those customers who trade with them. Schwab customers begin with 100 quotes in a "quote bank," and they get another 100 free quotes for every trade they make. Schwab charges 65 cents per minute for each real-time quote for stocks that clients don't own. (Quotes on your positions are unlimited.) If a customer is a big player -- with at least a $100,000 in his Schwab account -- the quotes are free.
The demand for instant gratification doesn't stop with real-time quotes. Customers want real-time portfolio trackers as well. Datek, for one, obliges. "One basic thing that one would expect an online broker to have is real-time portfolio management -- they have all the data, how hard can it be to show them?" a reader wrote. "It differentiates them from full-service brokers, too."
Customers have also begun clamoring for a form of real-time stock charts. Most brokerages don't currently provide that kind of service.
Brokers should pay attention. Real-time quotes are available elsewhere online.
, a unit of
, has offered free real-time quotes since 1997 and claims about 500,000 customers. Investors who want real-time quotes with their trading services will gravitate to sites that offer both.
So why don't all brokers give away real-time quotes?
New York Stock Exchange
charge the brokers for real-time quotes. The Big Board charges professional subscribers $.0075 for each quote up to 20 million, and the price drops as more quotes are viewed.
According to the
Securities and Exchange Commission
, which is in the midst of examining whether the fees charged by the exchanges for real-time quotes are fair to investors, those fees have been reduced anywhere from 50% to 85% in the last year or so. It was due mostly to 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 exchanges in 1998, according to the SEC. That figure has undoubtedly ballooned in the last few years as online trading has exploded in popularity.
The price for delayed quotes? Naturally, they're free.
Informative provided the technology to conduct this survey.