Quotes of Commodity Futures: Why the Ten Minute Delay 4 November 2020
With the advent of internet technology, the price of the last trade of commodities and stocks is instantly available around the world. The futures exchanges saw an opportunity to make instant price quotes a marketable item, yet they did not want to kill the opportunity to provide the quotes to people who had a need or a desire to know the price quotes, but no need to know instantly the latest price quotes.
Thus, the creation of the ten-minute delay of price quotes. The first time I recall the ten-minute delay was in 1984 when Data Transmission Network (DTN) began offering FM radio transmission of market information beamed directly from the futures exchanges, as well as weather events and forecasts, cash price quotes, etc. Shortly thereafter, DTN offered a more reliable data transmission via satellite. By the 1990’s, legend has it the most common piece of equipment on farms in America was the satellite dish.
Cash grain merchandisers, commodity futures brokers and day traders and traders of large blocks of futures contracts needed instant quotes, but farmers, small speculators and hedgers did not need instant quotes. One could get instant quotes in the 1980’s on a DTN screen, but each exchange charged varying amounts which totaled $435 per month for the Chicago Board of Trade (CBOT), Kansas City Board of Trade (KCBOT), Minneapolis Grain Exchange (MGE) and the Chicago Mercantile Exchange (CME). As a great marketing ploy, the total fee was just $40 less than the monthly fee for a tele-type machine for same information. In the early 1980’s, every sizeable grain elevator had a teletype machine, which was as large as a clothes washing machine, spewing hundreds of feet of paper all day long.
Since the late 1990’s, all that information and much, much more has been available at no cost to anyone in the world with internet access, but with a ten-minute delay on price quotes unless one pays the instant quote fee or his brokerage firm or grain merchandiser provides instant quotes to customers as part of their service package. I heard a few years ago the instant quote fee was something like $135 a month, but I really do not know and don’t need to know because I am not a broker.