Why Stock API Prices Differ and Which Price Your App Should Use

Stock prices from APIs can vary significantly compared to charts or brokerage platforms. These differences arise from various factors such as the type of trade, the quote, the session, the data feed, and adjustment rules applied to historical data. To accurately compare numbers, it's crucial to define a specific price for each application feature.

For instance, a watchlist might display the latest traded price, a spread display requires both bid and ask prices, and a historical chart needs a consistent bar and adjustment policy.

Consider a synthetic stock with a latest reported trade price of $100.00. Following this, a quote shows a bid of $99.98 and an ask of $100.06. Prior to this, the close price for the regular trading session was $99.50. Depending on how this information is used, a watchlist, spread display, and daily-change calculation can legitimately utilize different values from this dataset.

The first step is understanding what each number represents. Simply pointing out a difference does not automatically mean a provider is incorrect. Similarly, varied definitions shouldn't be used as an excuse for poor data quality. Once the instrument, observation, and conventions are aligned, any discrepancies that remain should be investigated.

Trade prices and quoted prices serve different purposes. A last trade reports a transaction that has been included in the feed. Conversely, a bid represents a quoted buying price, while an ask represents a quoted selling price. The best bid and ask pertain to the coverage of the chosen feed, which may not encompass the entire market.

For the aforementioned synthetic quote, the spread amounts to $0.08, and the midpoint is $100.02. It's important to note that this midpoint does not necessarily correspond to a trade at that price. The earlier $100.00 trade remains the latest trade, even as the quote fluctuates around it. This distinction aids in defining alerts.

For example, "notify me when a reported trade exceeds $100" and "notify me when the ask exceeds $100" refer to different conditions. Clearly specifying the type of observation is essential, followed by deciding how the application should manage repeated updates and reconnections.

Additionally, a price alert must be kept separate from an order: a displayed quote does not guarantee an execution at that price or for the desired quantity. The Alpaca API provides clarity on this distinction through its description of best bid and ask prices, along with a feed parameter. The provider offers choices such as IEX, SIP, and delayed SIP for the endpoint. The endpoint name alone does not determine the venue coverage or the freshness of a particular response.