Stock Screener vs Stock Scanner

The terms stock screener and stock scanner are frequently used as they would stand for the same, but by taking a closer look at the meaning of a scanner vs. a screener, it becomes apparent that there is a clear difference between both.

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Stock Screener vs Scanner – The difference

Let’s review the fundamentals of stock screeners vs. scanners and their similarities and differences.

Stock Scanner

Stock scanners come with real-time data (e.g., tick data from NYSE and Nasdaq) and identify potential trading opportunities based on specific pre-selected criteria and alert types. Such filter criteria include trading volume, stock price, price gaps, and technical indicator values.

A stock scanner is most frequently used by day traders who want and need their trade alerts in real time since every second counts in the decision-making process. The typical time intervals are the tick chart, 1-minute, 3-minute and 5-minute.

A stock scanner always updates itself in real-time without any user interaction needed. The charts refresh, the indicator values, the trade alerts, everything comes in in real-time.

Stock Screener

In contrast, investors who set filters on large data samples such as market capitalization, earnings results, and dividend yield estimates mainly use a stock screener.

The time interval data is primarily based on end-of-day data for time frames such as the daily, weekly and monthly charts.

Stock screeners often use one fixed data point when the tool gets started and then need user interaction to refresh the data.

A stock screener is often combined with analytical tools like charts with multiple trading indicators.

A Detailed Perspective on Market Data

As lined out, market data makes the big difference between stock scanners and screeners. Still, not every real-time data is the same.

Real-time tick-by-tick data: The original data feed from Nasdaq and NYSE are delivered tick by tick. The data feed contains every trade made on the stock exchange. Such a high amount of data is expensive, and the processing capabilities and needed infrastructure are compelling.

That’s why most tools don’t use tick-by-tick data.

They aggregate the data to a certain level to save data storage, fees and bandwidth.

Therefore, those needing real-time tick data should ensure the tool delivers it. Real-time data can also be a data feed from one ECN and sub-network like BATS. So if your tool provider advertises with real-time data, make sure they have the same understanding about the data quality that you have.

Delayed market data: Delayed market data is cheaper and typically still include intraday time frames like 1-minute, 5-minute or 15-minute. Still, that data is delayed by a couple of minutes. The delayed data feed can still be provided via the original stock exchanges, but the tool provider pays fewer fees and can offer that data for a lower price to its clients.

End-of-day market data: End-of-day market data only consists of the open, high, low and close price of a day. That data is then aggregated into the weekly, monthly or yearly time frame. In contrast to intraday market data, the end-of-day data is mostly free and often used by free web-based market screeners.

User Interfaces

On the surface, screeners and stock scanners may look similar. Still, scanners have much more configuration capabilities where users can adjust how the data is visualized, what data is used, and what filters are applied to deepen the analysis.

You can think of it like buying a pre-configured trading PC vs. building one yourself. The pre-configured one gets delivered after simply choosing the one you want, while the custom PC requires a specific definition of what CPU, motherboard, RAM etc., you want, then it gets assembled based on your requirements and then gets delivered.

A stock scanner also comes with pre-build layouts, but it has much more flexibility in defining scanner criteria. In contrast, the stock screener typically has one main interface where every screening takes place in a pre-defined way.

Define What You Need

A stock scanner scans market data in real-time and much more efficiently than a stock screener if the data is needed in real-time.

Stock scanner software like Trade Ideas, Benzinga Pro and Black Box Stocks is the best option for day traders, while stock scanners like TrendSpider, TradingView and Finviz are often used by investors and swing traders who don’t need tick data.

Independently what the names, advertisements and feature descriptions suggest, it is upon you to define what you need for your trading style in the first place. So, if a tool calls itself a stock scanner but only has end-of-day data, that’s okay as long you only need end-of-day data.

Therefore the decision-making process starts with the definition of what you need. Then you have to choose the tool that fulfills your requirements the best for the lowest possible price and the highest possible quality.

Stock Scanner vs Screener: Conclusion

Trading technology has significantly changed over the last century, but many tools still use old technologies and never develop further.

Numerous vendors complicate the matter by advertising their platforms as stock scanners, attracting you to earn your subscription, but most of those advertised tools are just screeners and not scanners.

At the end of the day, the main work, unfortunately, lies with the user again. First, he has to define what he needs and then explicitly check if the tool offers what he needs, independently of how the tool is advertised.

As a rule of thumb, a free tool can never be a high-performing stock scanner since stock scanners have real-time market data, which is expensive. A tool developer has to pay a fee per user to the NYSE and Nasdaq and, therefore, cannot offer the tool for free. That’s why end-of-day data-based tools are often free, delayed market data or ECN-specific data is often cheaper, and tick-by-tick real-time data is the most expensive and not available for free.