For decades, the Bloomberg Terminal has been seen as the gold standard for day traders looking to succeed at a high level. The Terminal gives users access to all live data, along with the tools to make fast trades. However, it has traditionally been a product targeted at businesses, considering that it will cost you at least $24,000 a year.
As a casual trader, you're not going to spend this kind of money. Even if you have the capital available, it is just not worth it. You'd be starting at a huge deficit. It is for this reason that apps like Robinhood have become so popular.
Robinhood and the like are apps which provide the full functionality needed to make trades. Using Robinhood is free, and many traders swear by it, claiming that it is just as good as using the Terminal.
Is there any truth to this? Let’s take a look at what the Bloomberg Terminal offers and if it can be matched by fully functional trading apps.
What Is The Bloomberg Terminal?
In terms of pure ergonomics, the Bloomberg Terminal may appear to modern traders as a relic of the past. It is a set up that requires multiple screens and a lot of processing power.
There is a reason for this. The Bloomberg Terminal was created in the 1980s. While it has evolved a lot since then, the principles on which it works are the same. The data is readily available in a way that is easy to view and understand. It provides the processing power necessary to make complex decisions in real time.
Over the decades since its launch, the Bloomberg Terminal has offered more and more data and capabilities. Its data comes in two forms: cold, hard numbers and analysis. It provides detailed figures regarding company financials, real-time stock prices across stock exchanges, twenty years of historical market data, and graphs and charts to visualise this data.
It also provides real-time market news curated through a combination of Bloomberg experts, as well as AI and machine learning (ML). It allows you to filter data that is relevant to you, with easy autocomplete suggestions.
In addition to all of this, you can use a myriad of applications to actually carry out trades. These are called Bloomberg functions and, while there is a learning curve, they are intuitive and easy to use. To assist you, there is a specialised Bloomberg keyboard, with keys that carry out specific commands, colour-coded for ease of use.
As you can tell, the Bloomberg Terminal provides a fortune of value. It was developed for firms before trading became something accessible to anyone with a computer. Can a trading app really offer the same capabilities?
Does Robinhood Have The Same Functionality?
Robinhood is marketed as a fully-functional trading app. You can do everything from it, including setting up an account, accessing and interpreting data, and making the actual trades.
Thus far, Robinhood has proven its value. Many traders have made a lot of money using Robinhood alone. They have done so despite not having studied economics in college and without using a setup that costs tens of thousands of dollars.
However, full functionality does not equate to the equivalent value of a Terminal. While Robinhood and other trading apps are useful and effective, they simply cannot provide the same immediacy and ease of use as a Bloomberg Terminal. You are still working with one small screen that gives you a limited view of limited data.
The extent of this data has nothing on the Bloomberg Terminal. Whereas the Terminal offers extensive data, including figures and news reports, regarding various companies and exchanges, Robinhood offers live market data. It is very useful for traders who need to make decisions, but the onus of research mostly falls on you. You can get a lot of the data Bloomberg provides online today, especially if you have a Bloomberg subscription, but you have to find it yourself, trawling through online news and archives.
Depending on what you want as a trader, this may not bother you. If you plan on making a passive income by investing your money, you do not need the immediacy provided by a Terminal. If you are trading casually and avoiding volatile stocks, you can rely on what you get from Robinhood.
But if you want to make money by day trading, working off the volatility of various stocks, you cannot beat the Terminal. It gives you a huge advantage by offering more than any single app could.
So, what do you do if you don’t have tens of thousands of dollars to spend on a Bloomberg Terminal? Are there alternatives?
Bloomberg Anywhere And Alternatives
If you work for a business that uses the Bloomberg Terminal, you may want to look into Bloomberg Anywhere. Bloomberg Anywhere allows you to access your Terminal from home. This is, of course, a scenario that most new traders are not privy to. The reality is that you are not going to get access to the Bloomberg Terminal at home in any way.
There are alternatives to the Bloomberg Terminal which can be used at home. These are terminals designed by other companies and vary in features and quality.
FactSet is definitely the option that is most equivalent to the Bloomberg Terminal. However, it will still cost you $12,000 a year in membership. While this is half the price of using a Bloomberg Terminal, it is still prohibitive for most individual traders.
Another great option that comes at a high price is the Refinitive Eikon. In terms of market share, it is the Bloomberg Terminal’s biggest competitor. The difference with the Eikon is that you can get a stripped-back version for $3,600 a year. This is a more reasonable expectation for day traders getting involved in trading from home.
If you are looking for a free alternative, you can try out Koyfin. The Koyfin terminal is reliable, providing a lot of data with effective graphs and charts to help you make decisions. It is very limited compared to the paid terminals, and you may find it difficult to differentiate what it offers from what an app offers.
Bloomberg Terminal vs Robinhood
When you put these two options head-to-head, the clear winner is the Bloomberg Terminal. This should not be too surprising, considering the price differential. Traders who truly want an advantage will benefit most from using a Bloomberg Terminal or one of its competitors.
The question you need to ask is how dedicated you are to trading. If you intend to quit your dayjob in order to start trading, the cost of a Bloomberg Terminal will make a lot more sense for you. But if you plan on making some extra income using your spare hours to trade, it will take a long time before you are earning enough just to cover the annual cost of a Terminal.
Fully-functional stock trading apps do what they promise. They cannot, however, provide the same value as an expensive terminal, whether from Bloomberg or an alternative. For casual traders, an app like Robinhood should be more than enough to start making some good passive income.
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