What is a Real-Time Quote?

A real-time quote is a stock quote that feeds directly from the exchange and does not have a time delay.

How Does a Real-Time Quote Work?

A stock quote is an estimate of price or a price at which one party is willing to buy or sell a certain number of shares of stock from the other. A quoted price consists of a bid price and an ask price, but real-time quotes go beyond just those two pieces of data.

For example, a level I quoted price is the real-time bid and ask price for a security that trades on the Nasdaq or over-the-counter markets. They do not disclose which market makers are bidding for or offering the security, whether there are limit orders on the security, or the size of potential trades at a particular price.

A level II quoted price is a set of real-time trading information for a security that trades on the Nasdaq or over-the-counter markets. It includes the real-time bid price, ask price, quote size, price of the last trade, size of the last trade, the high price for the day, the low price for the day, and a ranked list of the real-time best bid and ask prices from participating market makers.

A level III quoted price includes all of the above but also allows a market maker to change its bids, offers, and order sizes for securities in which it makes a market, as well as execute orders, change quotes, and send out trade confirmations.

Why Does a Real-Time Quote Matter?

Making money in the market sometimes means being able to pounce at exactly the right time. Real-time quotes inform investors about the prices of securities and allow them to act quickly. It is important to note, however, that obtaining real-time quotes often costs money for a proprietary feed. Stock quotes available on Yahoo or Google, for example, are almost never real-time and thus can cost day traders and other investors who are concerned with second-by-second price changes.