What Is a Bloomberg Terminal?
A Bloomberg terminal is a computer system that allows investors to access the Bloomberg data service, which provides real-time global financial data, news feeds, and messages. Investors can also use the Bloomberg terminal's trading system to facilitate the placement of financial transactions, such as stock and options trades.
Bloomberg charges an annual subscription fee, with the price for the proprietary electronic trading system at an estimated $27,660 per year, as of 2020.
Key Takeaways
- Developed by businessman Michael Bloomberg, a Bloomberg terminal is a popular hardware and software system that allows investors access to real-time market data, investing analytics, and proprietary trading platforms.
- Because of their relatively high cost, Bloomberg terminals are typically used by large institutional investors, portfolio managers, and financial analysts.
- Bloomberg offers investors independent stock research from more than 1,500 resources, charting tools, and trade analytics for both the buy-side and sell-side.
- Bloomberg's biggest competitor is Thomson Reuters—which offers Eikon, a set of software products designed to help investors analyze and trade the financial markets.
- Both Bloomberg and Reuters are seeing competition from other companies that offer similar products at a lower price, most notably Capital IQ and FactSet.
How a Bloomberg Terminal Works
Bloomberg terminals are one of the main product offerings from Bloomberg L.P. They are one of the most heavily used and highly regarded professional investment systems to be created for the financial marketplace. Institutional investors are the typical customers of this product since the relatively high ongoing cost makes it unfeasible for individual investors with relatively small amounts of capital to purchase.
The system provides news, price quotes, and messaging across its proprietary secure network. It is well-known among the financial community for its black interface, which is not optimized for user experience but has become a recognizable trait of the service. It's not uncommon to see Bloomberg's rather bland visuals carried into their television station, although they round their media empire out with visually rich content in their flagship magazine Bloomberg Businessweek.
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325,000
The approximate number of subscribers worldwide of the Bloomberg terminal.
Benefits of a Bloomberg Terminal
The Bloomberg terminal was developed in 1982 by New York businessman Michael Bloomberg. The terminal was originally a "piece of dedicated, all-in-one hardware for connecting to a network." Now, the terminal operates on any PC via Windows-compatible software, a custom Bloomberg keyboard, and fingerprint scanner. Based on design, the system is compatible with the popular Excel program, a very important aspect of the system for those in the finance industry.
Bloomberg also offers users access to the application online and through mobile devices, via its Bloomberg Anywhere service. For portfolio managers and brokers, having the ability to access real-time market information from almost anywhere in the world is an incredibly convenient and important advantage of a Bloomberg subscription.
Bloomberg's instant messaging service has become popular among traders, who use it to post quotes, updates on trades, and news about market activity. The tools included in the Bloomberg terminal are widely used by portfolio managers, sell-side finance professionals, and buy-side analysts. Bloomberg's data sets are comprehensive and quickly updated to reflect current market activity. Bloomberg's treasure trove of fixed income data appeals to bond traders.
Bloomberg Terminal Competitors
The largest competitor to the Bloomberg's Terminal is Thomson Reuters, which started offering its Reuters 3000 Xtra electronic trading platform in 1999. Then in 2010, they launched the Eikon platform, which officially replaced its predecessor in July 2012. In 2018, Thomson Reuters completed a deal with the private equity firm Blackstone, selling a 55% stake in the company for approximately $17 billion in gross cash proceeds.
Bloomberg and Thomson Reuters split the market share in by 2010, each coming in at around one-third of the market. In 2018, Bloomberg's market share remained at around one-third compared to Thomson Reuters' drop to 22% market share. In 2018, Thomson Reuters sold its financial data and analysis platform to Blackstone Group under the rebranded name "Refinitiv," and announced a renewed focus on enhancing the firm's flagship products, the Eikon desktop platform and the Elektron data platform.
Refinitiv was later sold to the London Stock Exchange (LSE) Group. Bloomberg still commanded a one-third market share as of 2022, with Refinitiv holding its own at 19%. The rivalry between Bloomberg and its competitors continues, as competitive pressure from smaller firms that offer financial data and analysis at a much lower price point. Two such firms are and FactSet. The proliferation of big data, analytics, and machine learning look to cut into Bloomberg's stranglehold on the financial data space.
Can You Trade Directly From a Bloomberg Terminal?
Yes, you can place a wide range of order types and trade from the Bloomberg Terminal. The Bloomberg Terminal can serve as a complete end-to-end trading system across a wide range of markets and financial products, such as trading stocks and options.
How Much Does a Bloomberg Terminal Cost?
The Bloomberg Terminal is only available as a subscription service and can run around $2,020 per month, or $24,240 for a year if there are two or more licenses. For a single subscription the cost is $27,660 per year. There are discounts available for academic licenses by universities for purposes of education and research.
What Are Some Alternatives to the Bloomberg Terminal?
While the Bloomberg Terminal remains the dominant technology platform in the financial world for market data, analysis, and breaking headlines, several other competitors exist. According to Investopedia's own reviewing, among the best include:
- Best Overall:FactSet
- Best Free Terminal:Koyfin
- Best for Financial Data and Analytics:Refinitiv Eikon
- Best for Live Chat:Symphony
- Best for Data Visualization:YCharts
- Best for Market Research:AlphaSense
Can I Invest in Bloomberg's Company?
No, Bloomberg, LP, the maker of the Bloomberg Terminal (owned by billionaire and former NYC mayor Michael Bloomberg), is a privately-held company.
