Real-time ASX price data becoming FREE for regular punters

Is this the new frontier in the online brokerage price war? Is it a victory for ASX retail investors?

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Once the exclusive domain of professionals, real-time ASX share price data is starting to become available to the average punter.

Popular online broker CMC Markets plc (LON: CMCX) last week brought its price of ASX live data to $0. It was previously on 20 minutes delay if the user didn't pay extra.

A mobile trading app, Marketech Focus, also announced this week that real-time data would be shown to its customers as default.

CMC Markets Asia-Pacific and Canada head Matt Lewis told The Motley Fool that the company is bearing the cost of providing this service.

"This feature enables customers to keep on top of price actions in the market," he said.

"This is a cost CMC Markets will take on from our bottom line to benefit our customers in lowering their overall trading costs."

Why give away real-time data?

The number of new retail investors performing 'day trading' has boomed this year amid the COVID-19 pandemic.

Lewis said that CMC's customers had demanded live data. 

"We want to continue to build on our value offering to help drive success for our self-directed trading community," he said.

"The decision to offer free live data is driven by customer feedback. We received this feedback and we listened."

Marketech Focus managing director Travis Clark claimed his app is a trailblazer in the smartphone share trading space.

"Our feature-set, especially streaming real-time pricing, lifts Marketech to a new level of functionality and sophistication not available to most retail traders at this price point and rarely provided by our competitors," he said.

"It clearly lifts us above opportunistic new share trading apps that typically only offer fairly basic services."

The upstart budget platform Superhero, which has been dubbed Australia's version of Robinhood, shows delayed ASX data on its Basic plan. Only an upgrade to the Live plan for $9 per month shows up real-time information.

Real-time share market data could be good for you

An investor behavioural academic told The Motley Fool earlier this year how delayed data encourages dangerous risk-taking.

"Some trading apps offer a low-cost option, which means for a basic account holder, you can only view market data with a delay and you can only place market orders," said RMIT senior lecturer Angel Zhong.

"The limited data provided to retail investors exacerbate their impulsive buying and selling, as they can't see a complete picture of the underlying stock."

However, ultra-low brokerage costs also stoke social trading, which can lead to irrational buying and selling decisions.

"Social trading refers to exchange of stock trading ideas in groups and discussions on social media websites such as Facebook, Twitter and Reddit," Zhong said. 

"With easy and low-cost trading platforms, retail investors may act on misleading information from social trading and suffer losses in a highly volatile market."

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook and Twitter. The Motley Fool Australia has recommended Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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