Stock Screener vs Scanner: The Similarities & Differences

Anyone in the market for a stock-trading research tool will be confronted with two choices:

  • Stock screener
  • Stock scanner

You see, in the 90s, none of these two existed. In fact, computers could hardly do much. You had to get your investment ideas through newspapers and expensive financial magazines.

Those days are gone and here we are talking about stock screener vs scanner i.e., their similarities and differences. 

These two were designed with only one goal in mind – to make it easier for investors to access information as quickly and efficiently as possible.

But as closely related as they are, quite a few differences exist between them. Without further ado, let’s delve deeper into those.

Scanner or Screener? Find Out Which One’s Best for You

A scanner is a tool that helps you feel the market pulse in real-time. On the other hand, a screener provides you with deeper analyses based on your preferred criteria.

Much as both enable you to take advantage of prime opportunities in the market, they do require different approaches for optimal results.

You’ll want to use a scanner if you want to make quick and swift moves. On the other hand, you’ll want to work with a stock screener if you want to take your time and make slower but sure decisions.

Still confused? Worry not, we’ll break this down further for you.

1. Difference In Market Data Use

Screeners typically rely on current and historical data for back-end processing. This way, screeners are able to provide alerts or feeds based on trends, volumes, and price action etc.

Scanners, on the other hand, primarily focus on relaying real-time data, streaming it as promptly as possible with minimal back-end processing. So, you get to see the exact behavior of the market at that particular time.

2. Resources Needed

Due to the fact that they have to fetch market information in real-time and relay it to you, scanners are highly resource-intensive. By ‘resource-intensive’ we’re referring to the manner in which these tools consume server-side resources.

As such, most companies no longer provide scanners as they are quite expensive to run and maintain. For example, TD Ameritrade used to have a scanner that was later discontinued in favor of their current screener.

Screeners are less resource-intensive and yet functional. They may not provide you with a real-time feed of the market but are still highly efficient as far as decision-making is concerned. As such, most major fintech companies have embraced them particularly to complement day and swing trading.

3. The Kinds of Traders Targeted

As you can imagine, these two appeal to different styles of trading. If you’re a swing trader, then by all means get a screener. The tool comes in handy when you need to identify trends and play within them.

For example, you can use the screener to identify a strongly-trending stock and open a trade just before it starts to rise again so you can exit after pocketing some profit.

Simply put, if you’re a trend follower or hunter, the detailed and analytical nature of a stock screener would heavily work in your favor.

Scanners, on the other hand, would work best for scalpers. So, if you’re the kind of person who targets minor changes intra-day price action environment, this is the kind of tool you need.

Scalping works best if you’re into the habit of opening trades in quick succession e.g., every few minutes. As you can see, you don’t have the time to identify any major trends in such cases and, therefore, screeners would be of little to no use.

4. Screeners Use Filters, Scanners Don’t

Versatility is the name of the game as far as screeners are concerned. Behind every stock screeners are dozens of filters that one can use to zero-in on specific trends. 

For instance, you can filter market data using the “sector” filter and that way, you only get to see information from sectors that are of interest to you. Likewise, you can use “return on equity,” “dividend yield,” “latest stock price,” “P/E ratio” among others.

Each one of these filters relies on the market data collected and stored by the screener over time.

What about scanners? These simply relay market data in real-time via a streaming format. You do not need to do anything to get this information. Of course, there’s a bit of filtering allowed but even this ends up with you accessing real-time streams of information.

5. Screeners are Static, Scanners Are Dynamic

Yup, you read that right. Stock scanners are updated every few microseconds. And that way, you can keep up with price action in real-time and make decisions on-the-spot. And of course, they provide a potential way to make quick bucks every few minutes (or even seconds).

Screeners are not dynamic, though. In fact, once you filter the information you need, all you’ll access is a static list based on both current and historical data. But just because they are static doesn’t mean that they don’t update. For that to happen, though, you need to refresh the page or conduct a fresh search.

This explains why we only recommend screeners for folks who are willing to open positions that they can hold for weeks or even months.

6. One Is More Common Than the Other

Scanners are quite rare out there – and for good reasons. They are a lot more complex to run and hardly ever produce information that’s useful to most traders who value research. Screeners are, however, quite common, in fact almost all fintech service providers we know of provide screeners.

Similarities Between Stock Screeners and Scanners

There’s no doubt that these two are as different as heaven and earth. But even there, quite a few similarities are shared amongst them.

The first one is that both save you a lot of time. Unlike the yesteryears when one had to rely on newspapers and magazines to have an idea of which stocks to invest in, nowadays you can do all that (and more) from the comfort of your gadget.

What’s more, these tools can help you find information even on small companies. This is because, typically, information is availed to you as soon as it is available. Indeed, this can help you uncover investment information you may not have known before.

Plus, with the right tool, it is possible to remove emotional and behavioral biases. This way, you can be a more confident and sure-footed trader.

Pros & Cons of Stock Screeners

Pros

  • Dozens of filters to choose from
  • Ability to dig deep into research
  • Can incorporate AI functionalities
  • Can provide direct access to brokerage platforms
  • Most of them are relatively easy to use

Cons

  • Static, not effective for real-time data use
  • Some can be complex to customize

Pros & Cons of Stock Scanners

Pros

  • A good way to feel the market in real-time
  • Can be used in combination with indicators
  • Can be easy to use as not many customization options are involved
  • They track a wide variety of stocks, currencies, and even commodities
  • A possible way to make money by the minute
  • Can help you take advantage of short-term opportunities

Cons

  • No in-depth analysis on data provided
  • Higher chances of making awful trades in the heat of the moment

Examples of Stock Scanners

1) Trade Ideas

Trade Ideas has a real-time scanner that watches the markets in for you in real-time. It then relays this information to you in a streaming format. And the best part, no manual intervention is needed to access new information as the system updates itself automatically.

2) Momo Pro

Momo Pro is a 2-in-1 tool in the sense that it integrates the features of a scanner and still has screening abilities. Their scanner is simply called the “Stream” in contrast with the screener which they simply refer to us “Discovery.”

3) Benzinga Pro

Benzinga is primarily known for its masterly of news. But besides that, it has one of the best scanners in the game. With it, you can get real-time updates using filters like float, volume, market cap, shares outstanding, and of course price. How cool is that?

Examples of Stock Screeners

1) Trade Ideas

Indeed, Trade Ideas provides you with a screener alongside a scanner. Unlike the scanner, this one provides you with filters among them volume, price and so forth. Once you input your preferred filters, the software retrieves a static list of stocks meeting that criterion. You can use this list to make decisions or refresh it to fetch new data.

2) FinViz

This platform provides you with an awesome selection of swing trading tools. It takes a highly visual approach to screening enabling you to have an easy time spotting potential entry and exit points. What’s more, a free version of it is available for beginners to use.

3) Stock Rover

As its name suggests, Stock Rover is home to a rich selection of stock screening tools. Plus, it provides you with access to 10-year historical data. And the best part, it is integrated with most popular brokerages.

Final Verdict

So, there you have it – a comprehensive look at battle pitting stock screeners vs scanners. The truth is that both tools are awesome. But for anyone looking for high-quality alerts, screeners are better. Scanners may be good but only if you have the right tools e.g., indicators so you can make informed decisions even based on short-term price action.