Understanding Derived vs. Exchange-Sourced Data

If you're evaluating market data, you've likely encountered the terms derived data and exchange-sourced data. While both provide insight into financial markets, they differ significantly in how they're created, licensed, and used.

Understanding these differences can help you choose the right data for your application while avoiding unnecessary licensing costs and exchange requirements.

What Is Exchange-Sourced Data?

Exchange-sourced data is the original market data produced directly by an exchange or securities information processor (SIP). It includes the actual trades and quotes generated on the market.

Examples include:

• Last trade prices
• Bid and ask quotes
• Trade sizes
• Exchange timestamps
• Order book information
• Raw options trades and quotes

Because this data originates from regulated exchanges, its use is governed by exchange licensing agreements. Depending on how you intend to use or display the data, you may also need exchange approvals, reporting obligations, or additional fees.

Exchange-sourced data is often required when:

• You must display official exchange prices
• Regulatory or compliance requirements specify exchange data
• Your customers require the original exchange feed
• You are redistributing raw market data

What Is Derived Data?

Derived data is information that has been calculated or transformed from one or more underlying market data sources using proprietary models or analytics.

Rather than reproducing the raw exchange feed, derived data provides values that closely represent current market conditions while remaining a distinct product.

Intrinio offers two real-time derived data products:

EquitiesEdge

EquitiesEdge is Intrinio's proprietary Fair Market Value (FMV) pricing feed for U.S. equities.

It provides:

• Last Price
• Open
• Close
• Volume
• Pre-market Volume
• Post-market Volume

For actively traded securities, EquitiesEdge prices typically track within a fraction of a percent of exchange-reported prices and are often indistinguishable during normal market conditions. Larger variances may occur for thinly traded securities or during periods of unusual market activity. The feed updates in real time and is available through both REST APIs and WebSockets.

OptionsEdge

OptionsEdge is Intrinio's proprietary FMV-derived options analytics feed.

It includes:

• Synthetic option prices
• Implied volatility
• Delta
• Gamma
• Theta
• Vega
• Strike
• Expiration
• Option type (Call/Put)

Like EquitiesEdge, these values are generated using proprietary valuation models driven by real-time market activity. For actively traded options, the calculated values generally track very closely to calculations based on exchange-reported data.

Why Choose Derived Data?

For many applications, derived data provides nearly the same practical experience as exchange-sourced data while avoiding much of the licensing complexity.

Common advantages include:

• No exchange agreements for standard use cases
• No exchange reporting requirements
• No exchange market data fees
• Lower overall cost
• Real-time updates
• Available through both REST APIs and WebSockets

These benefits make derived data an excellent choice for many financial applications, dashboards, analytics platforms, AI agents, and internal trading tools. The Individual, Startup, and Enterprise plans all include EquitiesEdge and OptionsEdge as part of their plan data package.

When Exchange-Sourced Data Is Still the Right Choice

Derived data isn't the right solution for every application.

Exchange-sourced data may be necessary if you require:

• Official exchange quotes
• Raw trade and quote messages
• Exchange-certified prices
• Full market depth
• Specific exchange licensing rights
• Regulatory compliance requiring original exchange data

Intrinio offers Enterprise Custom solutions for customers who need exchange-sourced datasets such as Nasdaq Basic, delayed SIP data, or real-time exchange options feeds. These offerings may require additional exchange approvals or licensing.

Which Should You Use?

Frequently Asked Questions

Is derived data delayed?

No. Intrinio's EquitiesEdge and OptionsEdge products update in real time.

How accurate is derived data?

For actively traded securities, Intrinio's Fair Market Value (FMV) prices and analytics typically track within a fraction of a percent of exchange-reported values under normal market conditions. Differences may be more noticeable for thinly traded securities or during periods of exceptional market volatility.

Can I build a commercial application using derived data?

Yes. Intrinio's Startup and Enterprise plans permit commercial applications that display included Intrinio data, provided you are not redistributing or reselling the raw data itself. Commercialization of your application is allowed as long as the application's value comes from its functionality and analysis rather than the raw market data alone.

How do I know which option is right for my project?

If your application does not specifically require official exchange-sourced market data, derived data is often the fastest and most cost-effective place to start. Many customers find that EquitiesEdge and OptionsEdge provide everything needed for their initial product launch, while avoiding the complexity of exchange licensing. If your requirements evolve, Intrinio also offers Enterprise Custom solutions for customers who require exchange-sourced data or specialized licensing.

Need help choosing the right data?

If you're unsure whether derived data or exchange-sourced data is the better fit for your application, contact the Intrinio team. We can help you determine the most appropriate solution based on your technical, licensing, and business requirements.