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A lot of active traders have questions before joining Robinhood. These questions can range from how safe it is to how to join. One of the most commonly asked questions has to be whether Robinhood is real time or delayed?
Robinhood has real time data on their app so the prices that you see are the actual prices of the security at that second. However the data doesn’t update every single second so after you refresh the page the quotes are likely to change.
The easiest way to make sure you don’t overpay because of these tiny delays based on refresh rates is to simply set limit orders when buying and selling (and this should be done on all brokerages honestly).
By setting a limit order you will only buy a stock, option, or crypto at or below the price that you set or sell it above your limit price. That means you will never accidentally sell for too cheap or buy too expensive like you can with market orders.
In this article, I’m going to help you understand how Robinhood approaches real-time and delayed quotes.
As a day trader, and a Robinhood user, I’ve been able to utilize real time quotes to my advantage and avoid any massive losses.
By sharing my knowledge, you should be able to get the same results!
To read the most popular books about stock trading just click here.
Is Robinhood Realtime or Delayed? A Closer Look
Real time quotes on securities (as the name suggests) are the actual price of a security at any given moment.
These quotes let traders or investors know the exact price of a stock they’re trading in real time.
You may have seen real time quotes on ticker tapes in the past, but apps like Robinhood display this real time information to help traders capitalize on quick moves in the market.
Without real time quotes, traders risk taking massive losses.
What is a Quoted Price?
In stock trading, a quoted price refers to the most up-to-date price a security is being traded at.
Investments such as bonds, stocks, and other commodities change frequently throughout the day.
This is a result of a variety of factors and events that occur and impact the financial markets along with the value of a range of investments.
By looking at the quoted price, you’ll learn the most recent bid and ask prices both buyers and sellers are looking for.
Who Needs Real Time Quotes?
As day traders, many people rely on instantaneous stock prices to be able to make transactions quickly.
Real time quotes are absolutely imperative for active traders. They give the price that the traders will pay when having an order filled.
If I was to base my cost on a delayed quote, I could potentially underpay for shares, but the risk of significantly overpaying is too high to take that chance.
It’s also unnecessary as Robinhood provides me with up-to-the-moment quotes.
What Are Delayed Quotes?
On the other end of the spectrum you have delayed quotes, which lag behind real time quotes by 15-20 minutes or so.
Delayed quotes provide a general idea of where stocks and indexes are.
Who Uses Delayed Quotes?
If you’re simply a casual investor whose goal is not to time the market, then delayed quotes can work for you.
You may also utilize delayed quotes if you’re a trader with a long-term stocks portfolio.
Because you’re not intending on selling your stocks immediately, you don’t necessarily need instantaneous price information.
Are Real Time Quotes Free On Robinhood?
Now that you know the answer to whether Robinhood quotes are real time or delayed you might be wondering if you have to pay for real time quotes or not.
Real time data on Robinhood is free for all of their users. You do not have to pay a fee to get access to these real time quotes.
The app has a partnership with Nasdaq to be able to provide last sales prices data in real time via Nasdaq Last Sale.
Nasdaq boasts more liquidity than any other United States stock exchange, which means they are one of the most accurate sources when it comes to real-time trade data.
To find consolidated real-time trade data all you need to do is go to the trade entry screen on the Robinhood app and tap “Market Price”.
This market data includes:
- The last sale
- Best ask price
- And the best bid
…across all of the US stock exchanges.
This can be significantly insightful when it comes to the supply and demand for a stock right before you place a trade.
The bid will show:
- The highest price buyer is willing to pay
- The associated number of shares at that price
- The stock exchange the quote came from
Taking Advantage of Level II Market Data
If you’re a Robinhood Gold member (which costs $5 a month) you can utilize Level II market data.
Instead of lumping all of the stock price data together, Level II Market data shows you multiple bids and asking prices for a stock.
If you’re a professional trader, this information can be used to help you make the best possible trading decisions.
With that said, both the regular market data you can see for free, and the Level II market data accessed through Robinhood Gold are in real time.
So… is Robinhood real time delayed? As I mentioned in this article, you have access to both real time quotes and delayed quotes as a Robinhood user.
To recap everything I discussed:
- Real time quotes are ideal for day traders and active traders who need up-to-the-second buying and selling data for a stock.
- Delayed quotes are more for casual investors or those with long-term stock portfolios who aren’t looking to immediately sell.
- Real time quotes are free to all Robinhood users
- Level II market data can provide more thorough information by displaying multiple bids and asking prices for a stock.
- Level II market data is only available with a Robinhood Gold membership for $5 per month.
If you’re thinking of using Robinhood, I’d say give it a try.
There are other alternatives out there, though, so don’t feel as if you need to stick with the app if it isn’t working for you.
Remember, there are downsides to trading on Robinhood. But that’s a topic for another day!