The financial market is one of the industries that has relied heavily on technological innovations for its operations. In the last few years, there have been new solutions developed to streamline the industry and make its operations seamless. One of the major driving forces for these solutions has been APIs (Applications Programming Interfaces). They have opened a channel through which companies come up with innovations to handle all their transactions and to meet the demands of the modern investor.
APIs are computing interfaces through which applications can communicate and share information with each other. This means that when building an application, developers do not have to work day and night getting the data needed for their application to meet its obligations. They can simply implement an API and obtain the data from other applications. This has made software development easier and faster.
What are Stock Market APIs?
As discussed above, APIs allow applications to exchange data and communicate with each other. Similarly, stock market APIs provide stock applications with financial market data for their operations. Traders and investors use APIs for stock to obtain structured data from complex market data while developers use them when implementing the functionality of their applications.
A few years ago, before developers and traders started using APIs, they had no option but to collect and analyze the financial data on their own. This was raw data from different sources such as newswires, indices, and stock exchanges. Such data was difficult to analyze and compare and often led to many investment mistakes. APIs solved this problem and made things easier.
When choosing a stock market API, there are a number of things one should look for. They include;
Latency
Latency refers to the time a stock market API takes to send data from the source to the application that made the request for data. APIs with low latency are accurate with their data and sent it faster than those that have high latency. You should make sure that you choose a stock market API with low latency for the successful transmission of data.
The Scope and Source of Data
It is important to choose APIs for stock that offer a wide scope of financial data. For instance, you need an API that guarantees you data such as stock data, exchanges, forex, news, commodities, options, and economic data among others. You should test the API to make sure that all this data is available. In addition, you do not need an API that gets its data from a public source. Such data might not only be illegal but also unreliable.
Data Being Transmitted
There are free and premium stock market APIs, with each offering different types of data. Before getting one of them, you should analyze the style you use when trading and choose the one that fits you better. The free APIs will get data sometime after its publication, usually about thirty minutes later. On the other hand, premium APIs will get data in real-time. There are also other APIs (or both the free and premium APIs) that offer historical financial data. The right API depends on the style of trading one employs.
Currency
There are traders interested in trading in a specific country while others trade in international markets. Trading in a specific country requires one to use that country’s currency since exchange rates might affect the value of money. International traders need to understand different currencies and choose an API that matches their requirements.
Scalability
The stock market is one of the most unpredictable industries we have today. There are times when everything will remain normal while other times things are below normal. However, there are times when things could spike, and the API you choose needs to be scalable enough to handle such spikes.
Security
Trading in the stock market is a confidential affair. Traders spent a lot of money buying and selling stocks. It, therefore, means that they need to work with a secure trading API. When choosing a stock market API, make sure that you get the one using secure servers and systems.
Finally, developers should choose an API with the functionality that meets their requirements. They need an API that is flexible and can integrate easily with the programming languages and the development environments that they use. With such considerations, both developers and traders will get the APIs that meet all their requirements.
