Financial Data Industry Overview and 5 Best Stock APIs in 2021
Financial data obtained through stock APIs explain the quality, development and how these data can benefit your algorithms.
Until recently, the financial data industry has experienced a digital revolution with the first cloud-first application programming interfaces (APIs) owned by major companies such as Bloomberg and Reuters Eikon.
In this article, we will focus on the features that should be in the stock data provider and which features make this system reliable and robust. In addition, the top 5 Stock API features in 2021 will be reviewed.
1-)Alpha Vantage: A globally open source financial data provider powered by Y-Combinator and created for investors and software developers.
2-)Finage: offers global stocks, forex, cryptocurrency and basic financial statements with its API, and real and historical data using Websocket.
3-)Xignite: An enterprise data provider that can be used for very important financial applications.
4-)IEXCloud: It is a subsidiary of the famous IEX exchange, called the “Swiss knife” of market data.
5-)Intrinio: Basic and alternative data provider that you can customize according to your business strategies
The data providers briefly described above will be examined in detail in the article. But before this review, we will examine what to look for when choosing a reliable Stock API, as well as some common tricks or issues. First of all, the first thing you should know is that free Stock APIs are not the best.
Common Pitfalls to Avoid when Choosing the Stock API
Programming interfaces used to connect financial market data consumers to relevant data sources are called Stock API. These APIs are very useful for software developers and investors because they have a simple to use, predictable and unified structure that contains many data at the same time to view financial data in a processed form.
Someone who needs financial data needs to write complex code to process and parse the raw data to understand the data of more than 10 stock markets in the US. But each of these exchanges speaks a different language, so to speak, to convey trade data. Therefore, without using a Stock API, this data will become unscalable quickly.
Apart from processing raw financial data to make it understandable, simple and free of unnecessary information, not all APIs on the market are designed in the same way and may contain traps that you may not notice at first glance. To give an example, we can think as follows;
For example, before you start trading, imagine collecting stock data and signals from the market for hours of study and research. Finally, you started trading with all your courage and confidence in your research. Then you suddenly saw that the investment you made caused you to lose 5% of your portfolio. When you research a little further to stop this loss, and you find that your Stock API is giving you data fluctuating between 1% and 5% margin of error, it may be too late for you.
This is why it is necessary to identify a good financial data source provider and know what type of data you obtain from these sources, how to best work with that data, or how to choose a different data provider if it is not suitable for your needs.
Adjusting historical price data
Stocks can have things called “corporate actions” that can affect the closing price of a stock. If these actions occur, they should be compensated by updating all historical data of the share. This transaction is called the “adjusted price” or “adjusted close” and is considered the “true closing price” of a share.
To give an example of corporate action, stock split would be a good example. If the stocks are split by 2–1, the number of shares owned by everyone in a company doubles, while the price of that share is halved. So why would they want to do this? For example, if you own 10 shares of APPL at $ 100, you now have 20 shares at $ 50, but the total value of each is still $ 1,000.
If this happens, a Stock API provider will need to come back and adjust to halve all prices for this corporate action. An ideal Stock API should provide both “adjusted close” and “unadjusted close” as well as when corporate actions occur. When you create a trading strategy around unadjusted closing prices, you may see price changes that will cause your price prediction to go crazy
Examples of market data providers with adjusted price: Alpha Vantage, IEXCloud, Finage, Intrinio, Xignite, Tiingo
Aggregation and Exchange specific
When you retrieve data from Stock APIs, you need to know whether this data is from a specific stock exchange or from aggregation. If you buy prices from an exchange and never trade on that exchange, your data will always be closed.
However, if it is not important to you which exchange you trade on and you get aggregated data, it will probably be cheaper and a better representation of the market. Aggregation can give you an advantage because it gives a better price indicator of the market as a whole as opposed to where the price is on a particular exchange, but maybe if you’re looking for an arbitrage strategy, exchange specific might be more ideal.
That’s why it’s important to know which data provider to choose based on your trading strategy.
Sample providers with consolidated data: Alpha Vantage, eodhistoricaldata
Sample providers with exchange-specific data: Intrinio, Finage, Xignite
Current Prices vs Historical
After building your strategies based on historical data, you should test them with real time data. However, the API you use may not have this feature. This is something you can easily look out for, but if you have a provider for historical pricing, you should also check if there is some kind of current endpoint to stay consistent.
Always look for quirks or patterns
Each stock market API platform can have a few quirks of its own. For example, the price of global exchanges can be in the currency of that exchange or it can always be in US dollars. Or there is a field in the API that shows the currency.
These APIs do not receive data from public sites and you can obtain highly unreliable data. It can even be illegal most of the time. In general, this information is not readily visible on sites, so be sure to ask before you buy.
Perhaps the time zone may change so look for a time zone field. After the quirks that APIs have, you should focus on your own quirks. Determine how and when you collect your data. If you are looking for the opening prices 30 minutes after the market opens, you can get these data a little earlier.
There are so many factors and oddities about knowing the data. The aim of this article is to draw some attention to these.
Yahoo Finance API and Google Finance API
If you are particularly interested in investment business for the past decade, you are aware of the two most important companies that have been on the scene in this digital transformation. Yahoo Finance and Google Finance. Although both companies used to have very popular APIs, there are different rumors that they no longer have official and public exchange APIs. One of them is this; Google and Yahoo provide a significant portion of their revenue from digital advertising. Incompatibility between advertising and API resulted in the suspension of official support for Google Finance API and Yahoo Finance API.
Yahoo Finance and Google Finance exist in the form of websites with advertisements for financial market information. Even for some market data, Yahoo Finance still has a download button. However, financial data websites and financial data APIs are different from each other. The former facilitates web browsing, while the latter provides programmatic access to the market.
Now that we’ve summarized what it takes to choose a reliable and robust API, we can review the 5 best Stock APIs available on the market.
Best Stock APIs on the Market
Unlike many fintech firms that originate from Silicon Valley and are based on Wall Street, Alpha Vantage graduated from the Y Combinator program in 2018 and is more culturally compatible with Silicon Valley. It is a company that is more engineering and product oriented. The most important goal of the firm is to be the most accessible and developable API for software developers and technology-oriented investors worldwide. Has derived data such as stocks, ETFs, mutual funds and forex (FX) and technical indicators in its product portfolio
Alpha Vantage ensures that the API is as seamless as possible with other tools. GitHub has stock APIs in Python, Javascript, PHP, Java, and other programming languages in more than 400 open source repositories. In addition to these, it has official add-ons for Excel and Google Sheets for users who want to access market data via spreadsheets.
Finage offers global stocks, forex, cryptocurrency and basic financial statements with its API, and real and historical data using Websocket. One of the major advantages of Finage is that subscription prices are the same for both individual investors and large financial companies. The server, whose motto is “financial data for everyone”, provides the opportunity to trade financial data, applications, investor financial software and tools for those who want to create financial applications and platforms.
Financial data business is usually owned by giant corporations and companies are monopoly in this industry, so when you want to get US stocks, forex or Cryptocurrency data in real time you have to pay high fixed prices from them, but Finage has a post modern platform and easy-to-understand documentation. It also provides easy, modern, affordable and instant access to all financial data sets.
High profile fintech and asset management companies such as Robinhood, Wealthfront, Betterment, Addepar, MoneyLion use Xignite as their financial data providers.
Founded in 2000, Xignite has become the referral financial data provider for corporate clients up to the renowned Fortune 500 level. It offers cloud-based, enterprise-level APIs and unlimited API request quota. This allows you to load the load you want on the Xignite server while scaling mission-critical business applications.
IEX Cloud is the market data service of IEX company. It covers both IEX exchange data and non-IEX information.
IEX Cloud covers stock data, news, forex, options, commodities, economic data and other alpha generating datasets. Thanks to all these multiple features, it can be nicknamed the “Swiss knife” among market data providers. In terms of data delivery tool, IEX Cloud offers REST endpoints in JSON and CSV formats, and Server Sent Events (SSE) streaming service as a Web Socket alternative.
Generally, the data provided by the previously reviewed Stock APIs are presented to the purchaser in bulk. But unlike other data providers, Intrinio offers a new and different product. With this data provider, you only pay for the data products and packages you want. Thus, your investments and applications can become more focused and planned. You won’t have to pay for data you don’t use.
Intrinio has an excellent range of data packages and bundles. It also has a rich alternative data set. Delivery tool includes REST and WebSockets. Intrinio founder Rachel Carpenter is considered an opinion leader and inspiring speaker in the field of fintech.
