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In a recent question (Were the shareholders of ZTNO (Zoom Technologies Inc.) just hustled?), I asked about an equity (stock) that appeared to suddenly go to zero. Other community members helpfully responded in the comments that it was likely a glitch.

In our ensuing discussion, community member @Fattie stated that these types of glitches are actually quite common. They did not know why, and felt it would make a great question.

This question asks just that: Why are there so many glitches in stock market data?

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Why are there so many glitches in stock market data?

The obvious answer is human error, aka GIGO (Garbage In, Garbage Out). Errors are made with stock market data entries.

Web site providers of free data subscribe to services that collect data. There's no real incentive (free?) for the provider to fix errors. The classic example of this is Yahoo Finance though they do not have a monopoly here. You can find a number of "bad data" posts on various Stack BBs and even more if you search the net.

Reliable data comes from two sources:

  • Data vendors who check for errors and clean up their database ($ubscription fee)

  • The stock exchanges who do the same. While not infallible, Time & Sales is the closest thing to perfect. It will prove the bid and ask every time it changes as well as shares and size for every trade.

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    One would assume that much of this is automated by computer, thus not requiring human intervention but how much is 100% minus "much of this"? If the answer is greater than zero then that's where the problem lies. I'm a retail guy so I have no clue what that number is. What I can tell you is that there have been many questions posted here about bad data and since I have access to Time & Sales, I have checked, often reporting that the bad data is the fault of the web site provider. – Bob Baerker Oct 23 '20 at 16:51
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    Yes, I get Time & Sales data from IB. OTC BB stock data is a fee based subscription which I do not subscribe to since I rarely trade BB stocks. And when I do, it's at another broker. I would assume that Time & Sales data would be included but I don't know if that to be a fact. – Bob Baerker Oct 23 '20 at 16:59
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    @RockPaperLz-MaskitorCasket There's probably a difference between historic data (time & sales) which can be "patched up" later if affected by a glitch and (near) current prices which can't (such as Yahoo show). My guess from your first question is you checked ZTNO's price on a few (free) sites when you saw the zero. I suspect that many sites showing (near) current prices will get their feed from one or two data sources: if one of those had a glitch of some kind (network interruption etc.) then all sites sourcing that data will be affected. – TripeHound Oct 23 '20 at 17:06
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    @TripeHound Great analysis. I guess it depends on how their system works. Usually, when there is no new data, most systems show the last known data. Option (c) seems best, as it is honest, with (b) the next best, but it seems sites like Google use (a) which is the worst and, as you mentioned, has only cons and no pros. – RockPaperLz- Mask it or Casket Oct 23 '20 at 17:22
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    @Fattie - Time & Sales isn't infallible. People make errors. The big difference is that the stock exchanges strive to provide correct data as do fee based data vendors some of whose products are very expensive (tick data?). Web sites like Yahoo, Google, MarketWatch, etc. pay a vendor and that's why an error is redundant across the board. There's little, perhaps no incentive for that vendor to correct mistakes. – Bob Baerker Oct 23 '20 at 17:35
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You’re mistaking common and frequent. Stock pricing glitches are common, but not frequent. That’s because of the vast volume of data — prices every few seconds for thousands of equities means that there are millions of data points every day. If one out of every ten million of those data points is wrong, then there will be several errors per week, which makes them common. But one error out of every ten million is a very low frequency of errors.

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  • If investors think they lost all their money even just once a month, I'm guessing they would consider it common and frequent! – RockPaperLz- Mask it or Casket Oct 24 '20 at 22:57
  • Your point makes sense, but I think it's misleading at best to say that this means such errors are "not frequent". You're using "frequent" only in the narrow sense of "how many erroneous events out of the total number of events". But in common usage "frequent" also refers to "how many erroneous events per unit of time". In this common sense, several errors per week is pretty frequent. I'm not sure there's much relevance to your notion of frequency; the question is really "why is the number of errors so high on a visible-to-the-naked-eye level". – BrenBarn Oct 24 '20 at 23:20

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