API is the short for Application Programming Interface. It is a software middleman that allows two applications to communicate to each other. Each time we use an app such as Instagram, send a picture, or check the route on google maps, we’re using an API.
Here’s how an API works:
- A client application initiates an API call to retrieve information- also known as a request. This request is processed from an application to the web server via the API’s Uniform Resource Identifier (URI) and includes a request verb, headers, and sometimes, a request body.
- After receiving a valid request, the API makes a call to the external program or web server.
- The server sends a response to the API with the requested information.
- The API transfers the data to the initial requesting application.
There are 4 types of API protocols, but we are concerned with only 2. Those are:
Simple Object Access Protocol is an API protocol built with XML. It is a communication protocol designed to communicate via internet and provides data transport for wen services. It enables users to send and receive data through SMTP and HTTP. SOAP API’s make it easier to share information between apps or software components running in different environments or written in different languages.
Representational State transfers is a set of web API architecture principles. There are no official standards (contrast to those with protocols). Also called as RESTful API, the API adheres to certain architectural constraints.
It is possible to build RESTful APIs with SOAP protocols, but they are viewed as competing specifications.
Now it is of utmost importance for us to understand what a cloud API is. A software interface that allows developers to link cloud computing services together is a cloud API. It allows one computer program to make its functionality and data available for other programs to be used.
Cloud APIs are often classified as vendor-specific and cross-platform. The former is written to support the cloud services of one specific provider, while the latter allows developers to connect functionalities from two or more cloud providers
The changes have greatly influenced modern financial institutions in the face of the stock market industry, which is growing so swiftly that it has created a paradigm shift. The landscape is influenced by innovative technologies like cloud-based application programming interface (API) for good reasons.
Stock market APIs’ importance can be understood by understanding what they do for financial market data consumers. Stock market APIs are a significant advantage to investors, traders, and software developers. It is because stock APIs can connect data consumers effortlessly with relevant and accurate data sources that they are seeking. Additionally, obtaining stock market data through APIs is coherent and simple.
APIs can be of different types – Rest API, FTP, TCP, etc. It is wise to choose the one according to your data requirements and speed . Some of the stock market APIs that are available in the market are Marketstack, Finnhub, Barchart, EOD Historical data, Alpha Vantage etc
We are going to discuss in a little detail about RapidAPI. Let’s see how can we build our own Stock Charts using Yahoo Finance API and Python. We are using yahoo finance since is it one of the most used financial websites globally. Yahoo Finance is one of the most reliable sources of stock market data. It provides market summaries, quotes, news feed about the companies and whatnot.
The unofficial Yahoo Finance API is available on RapidAPI.
We will first have to get access to yahoo finance API. How to do that? Lets find out.
- Sign Up for a RapidAPI User Account
To begin with, a person has to sign up for a free RapidAPI developer account.
- Go to the Yahoo Finance API Page
Search for “Yahoo Finance” in the search bar or directly click here.
- Subscribe to Yahoo Finance API
Click on the “pricing” tab and pick a pricing plan.
Now it’s high time to write some codes!!!! But before that, we must know which API Endpoint to use. Let’s learn how to build a stock chart app by creating a simple Python application that consumes the data from Yahoo Finance API.
Have a look at the left side endpoint listing in the API console page of Yahoo Finance. Multiple endpoints can be seen, categorized into stock and market.
We must look for API endpoints that provide historical data. A closed look at the endpoint lists show that the Yahoo Finance API indeed provides an endpoint for creating a chart.
Let’s now test this. Invoking this API with the symbol AAPL will give a series of data based on time range and interval.
That’s it! We are done!!
This is all you need to build a basic stock chart. So the crux is to extract the API response from the endpoint listed under market, parse it in a human-readable form and then plot it on a line chart.