Market data fees.

In plain English

Every trade and quote on an exchange creates a record of what was bid, offered and traded, and at what price. The exchange owns that record and licenses it. CME Group's annual report describes the offering as real-time, delayed and end-of-day quotations, trade and summary data, sold to subscribers directly or through third-party distributors. Its basic service is a flat monthly fee for each screen or device displaying the data, and its revenue from data rises or falls with its prices, its incentive programs, new data products and the number of devices in use. Who uses the data matters too. The SEC's Market Data Infrastructure release, on the U.S. stock market, counts professional subscribers, non-professional subscribers and non-display users (programs rather than people) as separate groups, and describes market participants depending on proprietary data feeds sold by the exchanges alongside the consolidated data the Commission oversees.

01Why it matters

Prices look free because they are everywhere, but someone is paying the exchange for them, often a broker or a financial website on the reader's behalf. For an exchange, data is a second business that grows separately from trading volume, and it comes from activity the exchange is already running.

02The math, step by step

Say a firm has 10 traders, each with a screen showing real-time quotes, and the exchange charges a hypothetical $100 a month per screen. The firm pays $1,000 a month for that one exchange's data. If it adds a program that trades automatically off the same feed, it may owe a separate non-display fee as well, and a website showing delayed quotes to the public could be on a different price list again.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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