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Stock Market APIs; What Are They & What Do They Do?

The financial market was established and has been around for a lot more than a long time. It’s worth mentioning that the financial stock market has always revolved around data. Even when there weren’t any computers, manual not-taking was used as a means of maintaining information regarding stock prices. These were later replaced by electric stock tickers, followed by computer printers.

The stock market has always been quick at adopting technological advancements, and this makes it a huge industry in itself. Stock tickers might be a tool of the past, but it’s safe to say that this technological advancement in the 1870s led to an era of real-time stock trading. When computers came in, they took the financial data market to a whole new level. Data feeds came in and most, if not all banks and brokerages began to depend on these feeds heavily to consume data which further helped this industry grow.

What Are Stock Market APIs?

Data feeds are now being used in the form of APIs to consume data. Stock Market Application Programming Interfaces (APIs) have allowed individuals to gauge into the data world and receive wide ranges of financial data from various sources regarding the stock market. APIs allow complex financial data to be parsed in a more streamlined manner. Used by traders and investors, APIs can also be used by developers in their digital tools to enhance their products’ functionality.

Without stock market APIs, these bundles of information would have to be consumed manually. Comparing different data and performing any analysis would be a hassle. To facilitate better-informed decision-making, brokerages use multiple APIs that provide current and historical data. 

Stock market APIs, unlike websites such as Yahoo Finance, provide a much more customizable experience to end-users due to their programmatic nature.

Stock Market API Parameters:

There are many stock market APIs that are free. However, all stock market APIs do not offer the same functionalities. Since they have to be used by individuals looking for different use cases.

There are many parameters to considerin terms of selecting which API to go with. However, some of the core parameters to consider when choosing APIs include the following:
  1. Data Sources: Most APIs mention the scope of the data they provide. This could be information in regard to exchanges, economic data, and news, among many others.
  2. Latency: The amount of time it takes for a signal to be transmitted to a recipient is referred to as latency. Individuals who trade frequently would be better off using an API with lower latency.
  3. Data Arrival: Some data providers provide delayed data to their users. This means the data arrives 15-20 minutes right after it has been published. Some providers charge a premium that will grant you access to data as soon as it’s been published. On the other hand, providing historical data is the specialty of some providers which can be used for analysis.
  4. Security: Security has a very high value in the financial market industry. Some API providers provide top-of-the-line security, whereas others don’t.
  5. Scalability: Even though these APIs are built to handle large amounts of data, it’s important to check if the one you intend to use would be able to handle sudden spikes in data amounts.
  6. Format and Compatibility: The data you receive from any API provider is important in terms of the format you receive it in because it should be compatible with the different systems you use. JSON, CSV, and XML are some of the standard formats data is provided in. You should keep in mind and ensurethat the data is compatible with the OS you are using.
  7. Pricing: Profitability is always an important factor in any line of work. The financial data market is no different. Some APIs allow custom pricing where you pay for only the services you intend to use. Others might charge a standard fee and grant you access to features you might not even use. On the other end, some APIs do not have any limit to the number of requests you make on any day. Others have a request ceiling where you might have to pay for additional requests once a certain number of requests has been made.
With IT and the stock market at an all-time high, the use of APIs is only growing. There is no doubt that as time passes by, more and more APIs will be available for use by developers and traders in their everyday activities.