Knowledge is power, as the famous saying goes, and few places is that more evident than in the world of investing. Since 1982, Bloomberg Terminal has been a beacon of light guiding investors by providing news, data, in-depth research, and a unique suite of trading tools to traders’ desktops.
Bloomberg Terminal remains relevant now, decades after its launch — but technology moves at the speed of business and there’s some ready, and often cheaper, competition.
What is Bloomberg Terminal?
The early 1980’s brought us many of the tools we use for investing. IBM launched the IBM PC. Apple released the first Mac. Bloomberg Terminal reached traders’ desktops during the same era, bringing an instant wealth of knowledge and financial data that would be impossible to assemble quickly with other tools of the time.
The Bloomberg Terminal, also called Bloomberg Professional Services, is a software system designed specifically for trading desks and financial markets. Users can place trades and monitor real-time financial market data. The proprietary system also gives access to breaking news and provides messaging capability to keep the team in constant communication to strategize or to move quickly when data changes or news breaks.
Knowledge may be power, but it isn’t free — or even cheap. Bloomberg subscribers can pay $20,000 to $25,000 per seat per year for fast access to information and the tools available with the proprietary trading platform.
Advantages of Bloomberg Terminal
Bloomberg Terminal has had its competitors in past years, but by providing a unique value proposition has risen to become the gold standard for financial market news, data, and trading tools. The famous black-screen terminal has become nearly synonymous with Wall Street.
Simply staying with Bloomberg Terminal requires no retraining for trading firms and no downtime while computing systems are installed or traders and other financial market staff learn to navigate a new system. A large part of Bloomberg Terminal’s advantage for current users is that it’s already there — and it’s proven.
Bloomberg Terminal Capabilities
- Live chat with other users: the place where many of Wall Street’s deals are made, a tradition that dates back to pre-internet Wall Street
- Fixed income securities
- API connectivity: allows programmers to connect with applications built in several programming languages including Python, Java, R, Matlab, and C#, as well as the ability to export to common office applications such as Microsoft Excel and Powerpoint. Excel pros can even have spreadsheets dynamically refresh, allowing them to sort tables based on real-time data points.
- Swap manager
- Foreign exchange
- Risk modeling
- Great customer support: Support for Bloomberg Terminal is reportedly outstanding. Unlike some companies who use a support staff that reads from a script, Bloomberg’s support specialists really are specialists and can guide you through complex reporting or export functions
Disadvantages of Bloomberg Terminal
The price for Bloomberg Terminal’s worldwide data and powerful financial market tools, making the terminal a status symbol, is likely also its Achilles heel. At $20,000 per year or higher for each seat, outfitting a multi-user office can be a pricey proposition. In the fast-paced world of financial markets, sharing often isn’t an option, and loses the benefit of messaging and viewing the same data in real time with another colleague or broker whether ten feet away or hundreds of miles away.
Critics have charged Bloomberg Terminal has been slow to react to market changes and the need for system upgrades to support newer hardware, such as the long wait for export compatibility with 64-bit systems.
Considerations for alternatives
If you gather a room full of traders and brokers and ask them each what their favorite feature is within Bloomberg Terminal, you’re likely to get more answers than you can process. Depending on your primary markets and how you use the data provided by Bloomberg Terminal, the software will have different advantages for each user.
Primary considerations for alternatives include:
- Real-time news feeds
- Real-time financial data
- Worldwide data on a wide variety of asset markets
- An API that permits export of data to other software or to custom applications
- A chat feature that allows communication between brokerages and in-house collaboration
Best alternatives to Bloomberg Terminal
Take a look below to see how Bloomberg Terminal’s alternatives measure up.
At less than a tenth of the cost of Bloomberg Terminal, Money.net’s $150 per month entry aims to give Bloomberg Terminal a run for the, well, money.
The management team for Money.net includes veterans of Bloomberg LP, including Money.net’s CEO, Morgan Downey, who ran Bloomberg’s global commodity division. Money.net’s strategy is to provide an a la carte solution, allowing subscribers to choose the services they need without paying for the entire suite, as is the case with Bloomberg Terminal.
Many of the same features Bloomberg subscribers use daily are available within Money.net — possibly as an add-on — and the software suite has received accolades for its Excel analytics plugin, which allows users to map data points and create customized queries. In addition to market data and analytics, Money.net also offers a built-in trading platform, a chat feature, and news and research.
Money.net’s real-time news solution, however, is an aggregation of online news sources as opposed to a direct feed as found with Bloomberg and Thomson Reuters.
2. Thomson Reuters Eikon
To date, Thomson Reuters’ Eikon has been the biggest competitor to Bloomberg Terminal, garnering nearly a 25% market share at times. The full suite of tools is priced comparably with Bloomberg Terminal’s complete suite, weighing in at over $20,000 per seat per year.
However, a lower-cost version, minus some features, is available for under $4,000 per year for each user. Thomson Reuters, along with Bloomberg and FactSet are noted for the reliable real-time data and news feeds.
At $12,000 per year, FactSet provides an affordable alternative to Bloomberg Terminal and provides financial data across all sectors. FactSet is well known for its powerful Excel plugin which enables custom Excel macros.
FactSet now also provides “scrubbed data”, similar to its competitor Capital IQ, scouring data buried in footnotes and disclosures to provide normalized non-GAAP data.
4. Capital IQ
Unlike some of its competitors, S&P Capital IQ is a web-based application, available from any computer, making it more convenient than dedicated terminals or software that can only be installed on a fixed number of machines, such as FactSet.
Similar to FactSet, Capital IQ also provides scrubbed data, a must-have for investment bankers and related firms. Capital IQ’s strengths are convenient access, scrubbed data — including links to sources, and lower cost. At $13,000 per year per seat, Capital IQ provides an attractive value proposition.
Launched initially as a messaging service to connect financial firms, Symphony is expanding its service through a partnership that will bring Thomson Reuters news, data, and analytics to the Symphony platform.
The startup, launched in 2014, is led by Goldman Sachs and includes other powerhouse investors such as Blackrock, JP Morgan, Citi, and Morgan Stanley. These are world class players with a vested interest in Symphony’s success. As brokerage and financial firms, they also have an acute understanding of what brokers and financial market experts need from the software as well as having an intimate knowledge of their competition, Bloomberg Terminal, having used it for years.
Pricing for the service, although still less extensive than Bloomberg’s offering, starts at $20 per license per month for small businesses, with customized pricing for enterprise clients.
The Benzinga Solution
We would be remiss if we didn’t mention our own financial data solution, Benzinga Pro. So while we won’t give it a ranking, here’s a little information:
Starting at $99 a month, Benzinga Pro offers a real-time newsfeed as headlines break on activist stakes, earnings releases, conference call key points, analyst ratings, rumors, the biggest movers, and many more actionable alerts.
From the ground up, Benzinga Pro was designed for average, everyday investors. From charting tools powered by tradingview.com, to an Excel compatible watch list, Benzinga Pro has all the tools day traders need. You can screen U.S stocks by market capitalization, price, and sector. The platform even gives allows you to view a breakdown of a stock’s peer group, financial statements, and view essential SEC filings.
Much like Bloomberg, Benzinga Pro is a direct feed of exclusive news bolstered by an aggregation of online news sources. Users even have the option to chat with Benzinga reporters to better understand what’s going on in the stock market.
You can try Benzinga Pro for free here.
Which financial data solution you choose isn’t always governed by cost alone. Some tools are better suited for certain tasks than others and there’s value in more comprehensive tools that offer more functionality. However, if your foreseeable needs are specialized or narrow in scope a multi-tool solution might be overkill and also might not offer enough specialization for your financial market niche.
At costs of up to $2,000 per seat per month, choosing a financial market data provider is a decision that merits in-depth research. By choosing the right tool to help guide your decisions and provide market insight, the cost can become a secondary consideration, however, because the right tool or suite can help you make more informed decisions, connect you with the right players in your niche, and help you prevent costly trading mistakes.