Can I deliver data feed legally if I pay the Exchange fees as a professional?

UniversalGoldmine · Oct 30, 2009

For example in Esignal or InterActive you can chose to pay the exchange fee as an individual or a higher fee as a professional (PRO).

My questions are if I pay the professional fee for the data feed of for example AMX, will I then if I have my own company the right to:

Deliver the data feed to my customers for free?

Deliver the data feed to my customers and charge for this service?

I am developing my own software program for automatic trading and plan to open a company to have clients being able to buy the software. If above is not the legal way to deliver data feed to my potential customers could you please let me know how this works or where to look.

Christian

donaldduke · Oct 30, 2009

UniversalGoldmine said:
For example in Esignal or InterActive you can chose to pay the exchange fee as an individual or a higher fee as a professional (PRO).

My questions are if I pay the professional fee for the data feed of for example AMX, will I then if I have my own company the right to:

Deliver the data feed to my customers for free?

Deliver the data feed to my customers and charge for this service?

I am developing my own software program for automatic trading and plan to open a company to have clients being able to buy the software. If above is not the legal way to deliver data feed to my potential customers could you please let me know how this works or where to look.

Christian

Unlikely.

You will need to talk to the exchange about reselling the data to your customers.

RichardDale · Oct 31, 2009

The answer is definitely not.

Your agreement with either eSignal product or Interactive Brokers is as an end-user, not as a wholesaler. They explicitly forbid you to redistribute the data in any way.

All exchanges are interested in charging fees for redistribution of real-time data. Typically this is a flat rate plus an amount per user.

Then there is the cost of the data feed. This starts at several thousand per month and goes higher very quickly.

Then you need a corporate actions feed to maintain the data.

I once worked out, on an exchange that was about number 10 in the world, you needed around $200,000 per year to cover data feeds, redistribution rights, communications links and server infrastructure. That's before you even have one user.

You mentioned AMX - I assume you mean AMEX. This is a NYSE Euronext exchange. See:
http://www.nyxdata.com
for information regarding their data feeds, redistribution fees etc.

I suggest you approach the real-time vendors and ask what sort of developer/reseller/referral programs they have. Rather than you trying to become a data vendor, let them do that work and you can concentrate on your automatic trading software.

A further alternative is for you to use something like AmiBroker which has support for several real-time data vendors and also has an auto-trade interface too.

UniversalGoldmine · Oct 31, 2009

Access for customers of historical data, legal or not?

RichardDale said:
The answer is definitely not.

Your agreement with either eSignal product or Interactive Brokers is as an end-user, not as a wholesaler. They explicitly forbid you to redistribute the data in any way.

All exchanges are interested in charging fees for redistribution of real-time data. Typically this is a flat rate plus an amount per user.

Then there is the cost of the data feed. This starts at several thousand per month and goes higher very quickly.

Then you need a corporate actions feed to maintain the data.

I once worked out, on an exchange that was about number 10 in the world, you needed around $200,000 per year to cover data feeds, redistribution rights, communications links and server infrastructure. That's before you even have one user.

You mentioned AMX - I assume you mean AMEX. This is a NYSE Euronext exchange. See:
http://www.nyxdata.com
for information regarding their data feeds, redistribution fees etc.

I suggest you approach the real-time vendors and ask what sort of developer/reseller/referral programs they have. Rather than you trying to become a data vendor, let them do that work and you can concentrate on your automatic trading software.

A further alternative is for you to use something like AmiBroker which has support for several real-time data vendors and also has an auto-trade interface too.

Thank you so much for your time and the information on the subject. If I have my own historical database from where customers could do backfills or download longer periods of data would this be ok? This would not compete/harm the direct data feed delivered originally from the Exchanges or their authorized vendors? But then again, I am afraid it might get on someone’s way.

Christian

UniversalGoldmine · Oct 31, 2009

Thank you so much for your time and the information on the subject. If I have my own historical database from where customers could do backfills or download longer periods of data would this be ok? This would not compete/harm the direct data feed delivered originally from the Exchanges or their authorized vendors? But then again, I am afraid it might get on someone’s way.

Christian

RichardDale · Oct 31, 2009

UniversalGoldmine said:
Thank you so much for your time and the information on the subject. If I have my own historical database from where customers could do backfills or download longer periods of data would this be ok? This would not compete/harm the direct data feed delivered originally from the Exchanges or their authorized vendors? But then again, I am afraid it might get on someone’s way.

Christian

You seem to think you "own" the historical data. You don't - you have been provided a licence to use the data according to the terms and conditions of the licence agreement. The original data vendor you obtained it from explicitly forbits you from redistributing the data whether it's realtime or historical.

_Please_ have a read of the licence agreement with your existing data vendor/broker.

It appears you are seeking to redistribute data on an illegal basis. This is never a good way to start a legitimate business. There are legal ways of doing this, but you must realise that realtime data is a costly business, and both data vendors (who invest a lot of money into it) and exchanges (who regard realtime data as a major money earning facility) vigorously pursue those who try to circumvent their systems.

You really want to do some quite sophisticated stuff (auto trading, real-time data feeds across thousands of stocks) - this is outside the realm of most retail level trading systems.

I suggest you talk with realtime data providers including eSignal, DTN (IQ Feed) etc. that may be able to help you with your requirements on a reseller or referral basis for your users.

Can I deliver data feed legally if I pay the Exchange fees as a professional?

UniversalGoldmine

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