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Level II Quotes / Level 2 Quotes

Level II Quotes / Level 2 Quotes - Definition

Real time quote provided by exchanges such as NASDAQ outlining the specific bid ask spreads provided by each market maker in the NASDAQ market.

What Are Level II Quotes / Level 2 Quotes?

Level II quotes are available in many exchanges included to the NASDAQ and enable investors to see which market maker is offering the best bid ask spread in an instance, real time. This allows investors to select the market maker with the most favorable quotes to trade stock options with. This is particularly important for professional aggressive option traders utilizing speculative option trading strategies that must be executed quickly and favorably as well as for option brokers who need to help their clients fill orders at the best price.

Access to Level II Quotes also made it possible for amateur, retail option traders to perform day trading where a couple of cents difference can make a huge difference to the bottomline.

OppiE's NoteAs mentioned above, NASDAQ Level II Quotes are more applicable to institutional and professional traders. For the retail, amateur option trader, your broker should be able to look for the most favorable quotes to fill your orders in.

Free Level II Quotes / Level 2 Quotes!

Here's free access to Level II Quotes courtesy of BATS:

note : we do not guarantee the accuracy of the above information and is for education
and reference purpose only. any decision to trade using the above information is done
at your own risk.

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How To Read Level II Quotes / Level 2 Quotes?

Here's how a typical Level II Quote screen looks like:

XYZ Company, Daily Volume 1,000,000, Low 200, High 300
BID 201 (REDI) ASK 202 (FAHN)
REDI    09:42   5   201 202   09:42   10    FAHN
OCTI    09:42   4   200.5 203   09:42   6    IITL

The above displays the Level II Quote of XYZ company with the most favorable bid and ask price, along with the time, quote, volume and symbol of each market maker (REDI, OCTI, IITL and FAHN). Many option trading daytraders compare the volume on the bid and ask price to have a feel of the bullishness or bearishness of the stock.

Advantages Of Level II Quotes / Level 2 Quotes

  • Detailed real time quotes making it possible for retail investors to trade directly with specific market makers for the most advantageous price.

  • A must have for option trading day traders

  • Disadvantage Of Level II Quotes / Level 2 Quotes

  • Can be very confusing and unnecessary for most retail investors and option trading beginners as brokers usually do the work of finding the best quotes.

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