Bid, Ask & Level II Data

In this section

FinStudio is designed to accommodate various types of price and market data, adapting to the specific offerings of different data providers. This flexibility is crucial for users who need comprehensive insights into market dynamics and wish to tailor their data acquisition to suit their trading or analytical strategies.

Handling Different Types of Data

Bid and Ask Data: Typically, when viewing current prices, the application displays the best bid and the best ask prices. These are the most immediate prices at which users can buy (ask) or sell (bid) an asset at market price. This basic data type is essential for understanding immediate market conditions.
Order Book Data: Beyond the top of the order book, which shows the best bid and ask, FinStudio can integrate more extensive order book data if provided by the data source. This includes Level II data, which represents the full range of available prices and quantities at which market participants are willing to buy or sell.
Bid, Ask, and Last Prices: Users have the option to store data including bid, ask, and the last traded price, depending on the provider's capabilities. The 'last' price is particularly useful as it shows the most recent price at which a security was traded.
Level II Data: For modules that require a deeper understanding of market dynamics, such as those used for detailed market analysis or sophisticated trading algorithms, FinStudio supports the storage of Level II data. This data type provides a snapshot of the entire order book, which can be pivotal for strategies that rely on depth of market information.

Data Provider Variations

The type of data available from providers can vary significantly:

Forex Markets: It is less common for forex market data providers to supply Last price or Level II data due to the decentralized nature of these markets. Typically, forex data may include bid and ask prices but not the detailed order book.
Crypto Exchanges and Futures Brokers: In contrast, it is fairly common for cryptocurrency exchanges and futures brokers to provide not only Last price but also detailed Level II data. This reflects the more centralized and structured nature of these trading venues.

Practical Implications

The ability to configure which types of data to store and analyze in FinStudio allows users to:

Customize Data Feeds: Tailor the data streams to fit specific needs, whether for high-frequency trading, detailed market analysis, or casual trading.
Optimize Trading Strategies: Utilize detailed market data to refine trading strategies, potentially gaining an edge by analyzing aspects of the market that are not visible through top-level bid and ask prices alone.
Enhance Market Understanding: Gain a better understanding of market dynamics through comprehensive data analysis, leveraging both top-of-book and full order book data as available.