Why are stock quotes delayed by 15 to 20 minutes?

 

This was one of the best answers to this question I have seen, so I copied it here for QP visitors. This was from http://answers.google.com/answers/threadview/id/301267.html

(Summarized and Modified a bit)

The stock quotes you typically see are freely available to the public and are therefore delayed on purpose by the relevant exchanges per their own rules:

How much lag is involved when accessing your delayed quotes?
Trading information on NASDAQ and OTCBB companies is delayed at least
15 minutes. Trading information on NYSE and AMEX companies is delayed
at least 20 minutes per those exchanges' rules. The Most Active
section is delayed at least 15 minutes for NASDAQ and 20 minutes for
AMEX and NYSE. The NASDAQ Indices and the Major Indices scrolling
ticker are delayed at least 1 minute. Mutual Funds are updated at the
end of each day.

http://www.nasdaq.com/help/helpfaq.stm

The reason for this delay is primarily one of 'home-field advantage'.
The exchanges make the rules, and therefore can establish different
performance levels to match up with different pricing levels for quote
information.

 

If you refer to this report to Congress on the Securities Exchange
Commission website, you will see reference to this:

 

Report to the Congress: The Impact of Recent Technological Advances on
the Securities Markets

http://www.sec.gov/news/studies/techrp97.htm

If you search for the word "delay" and go to the second occurrence, in
III.C.4.c "Pricing Services", you will see it discussed. Basically,
the delay on the basic quote service creates a market for a real-time
quote service that some parties will pay a premium for.

 

 

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