Accurate stock market data is crucial when it comes to making smart and timely investment decisions. Stock APIs give investors and analysts access to raw high-quality, real-time financial data that allows you scale your research by allowing programmatic downloading of data.
Every investment decision relies on dozens — sometimes hundreds — of variables. A Stock API helps you scale requests programmatically, or in raw form, so you can make these decisions faster and account for many variables and factors.
When you have access to clean, high-quality, real-time market data from multiple sources through an API, it simplifies the data science required to find an edge in markets.
In this article, we’ll explain how APIs work, how investors can access and use them, and the advantages of market data APIs for making smarter, more informed, and quicker investment decisions.
What Is a Stock API?
A stock API (application programming interface), also known as a financial markets API, is a type of an API with a financial focus. A general API is a software programming interface between one or more applications. APIs are designed to be a digital bridge with a gate at either end. APIs are a way to obtain the data directly, without a classic GUI (Graphic User Interface). In fact, APIs are often used to create GUIs.
If you’re new to APIs, think of this way: When you look at your trading screen, separate the data from the GUI. What if you could take that same chart, and load in data from a different exchange or data provider? Everything about the User Experience would stay the same, the data could just be replaced. An API is that data layer. Many of Tiingo’s users today use a third-party GUI that integrates into our API.
By avoiding a GUI, you can scale your filters and research faster. Rather than clicking and looking at data individually, you can write programs, or use the raw data in excel, in order to do broader and faster research.
If you’ve ever logged into an app with another account (e.g., using Facebook, Google, Slack, etc.), then you’ve used an API. Open Banking is another example of APIs in action, except with higher levels of encryption, more security, and in a financial sector setting.
Stock APIs work in the same way. With a financial API, you can access vast amounts of financial datasets in a format that’s easier to read, consume, and analyze than trying to pull data separately from hundreds of different sources, especially programmatically. Stock APIs make current and historical stock market data more accessible for investors and analysts who need the highest-quality information possible to make actionable investment decisions.
Historically, accessing financial data through APIs can be very expensive, with market leaders like Bloomberg charging premium prices to give investors, analysts, and financial firms a clean pipeline of market data. According to a respected Burton-Taylor International Consulting report, the investors and other businesses that need this information spent $37.3 billion in 2022, which was an increase of 4.7% year-on-year.
With more financial market data being generated every day, the importance of stock APIs are increasing. On a daily basis, Tiingo alone distributes 7 billion data points to our customers.
How Do Stock APIs Work?
Stock APIs are technology solutions that connect financial data from one or more sources to financial analysis tools, dashboards, and other software. An API, like Tiingo, is a web interface that makes data available in raw form. This is why some charting software will “plug” into Tiingo. It connects to our API.
From our earlier example above, most market data analysis software, such as brokerage platforms, pulls financial data from one or more APIs to ensure high volumes of real-time information from multiple sources. To connect to an API, there is often a layer on both the client application side, and API side, to facilitate this communication. Usually a wrapper, or adapter is written to help play nicely with both sides.
Anyone using an API needs an API “key” to open those gates. An API Key is a way to authenticate to the API server. Once you’ve got access, one piece of software will interface with another, or you can access the information sources that will come flooding through the gates.
Stock APIs can also offer different product and technical features. For example, one API might only pull data from U.S. stock exchanges, like NYSE or NASDAQ for the last 20 years. A different API could pull in data from worldwide indices, bonds, commodities markets, exchange-traded funds (ETFs), news sources, forex, and cryptocurrency exchanges.
It depends on what and how much market data you need when picking the best API to use. Your choices are also influenced by how you plan to access this market data. Before signing up for an API, make sure you know whether:
- It’s being plugged into an analysis platform, app, or tool you’re already using.
- You need to develop a custom-built solution.
In either scenario, the cleanliness, volume, data sources, and price all need to be considered. The best APIs, like Tiingo’s APIs, have built-in error-checking frameworks and algorithms that clean data, catch missing events, and create redundant feeds. Before reviewing the options, draw up a list of criteria for what you’re looking for in a financial API.
What Should I Consider When Choosing a Financial API?
Before signing up for a new API, take a moment to think about what you need. Ask yourself:
- What data do I (or my firm) need (e.g., end-of-day stock prices, news, forex, crypto, IEX intraday prices, etc.)?
- What types of endpoints are needed: a RESTful API for end-of-day and historical market data for fundamental analysis or a raw firehose of real-time financial data (in which case, you’d need a WebSocket interface)?
- What data format is required? Do you need JSON or a CSV file that you can use in Excel?
- How frequently will you need to make API calls, and how many API requests are allowed per day or per month? Are your requests limited by the minute or second? This partly depends on the volume of data you need and the endpoints used to access that data.
- Is real-time data available with low-latency API access?
- Do we need any third-party integrations?
- Has data quality been an issue, and how do we fix it?
These choices will influence the type of endpoint you’ll need and, therefore, the type of API key. It’s also worth knowing your budget for data and how much support is required.
In addition to making sure the API has the features and functionalities you need, you should also look for precision, speed, and uptime. Also, find out what kind of redundancies and error-checking processes are in place. You want to make sure the API can perform at the level you need and with the best data.
For example, Tiingo’s end-of-day price feeds each have a minimum of three data sources. This ensures that if one feed goes down, your operations don’t have to stop. It also means, data is error checked before being published.
How Do I Connect to an API?
Depending on the stock market API you’re using, you’ll want to check the API documentation to learn how to connect to the data. You’ll likely need an API key or API token as well as a programming language web request package. For example, you might use Python, Node, or PHP.
Use a Stock API to Access High-Quality Market Data
Stock APIs give investors the data behind the numbers for the tickers of individual securities, mutual funds, and ETFs. You can use the data to dig deeper and go in-depth with every analysis so you’ve got the whole picture.
But not all stock APIs are created equal. Successful investing relies on accurate and time-sensitive information. Otherwise, investors lose money, and no one wants that because of inaccuracies in the data. It’s even worse when brokers and traders incur client account losses because of poor-quality data or inaccurate analysis.
So make sure your stock API provides you with clean, high-quality data.
With Tiingo, you can pull intraday or 20 years of historical data through our various market data APIs, including our:
- End-of-Day Stock Price Data API
- Real-time IEX Stock Market Data API
- News API
- Fundamental Data API
- Crypto API
- Forex API
We give you access to the world’s financial markets at your fingertips, with high-quality, clean, and customer-friendly data.
Sign up for Tiingo’s reliable financial markets APIs so you can access the cleanest financial data around.