Originally Posted by gushansen
saw ur post somewhere about knowing how a stock is trading, anyway this month for the 1st time i bought level 2 on scottrade which shows me whos trading what stock and how many shares
you have any tips on reading this? looks like a bunch of nice colors flashing in my face with numbers
im assuming u look at the big block trades and if the stock moves up or down?
LOL...yes they are pretty colors.....huh?
Level ll basically shows the participants in a particular stock.On the Nasdaq each individual stock is REQUIRED to have at least 4 MM's.The bigger caps(MSFT,INTC,AAPL,etc) can have 20+ market makers.Along with these MM's you have ECN's such as ARCA/Island/INET that also provide trading access to these same stocks but also provide much needed/important liquidity
When you want to buy/sell a stock....the broker you use will either be listed on this screen(if they make a market in that secuirty) or use another vehicle such as a MM or an ECN to facilitate your trade
On the left side of the screen is the BID side.This is the amount someone is 'willing' to pay for that stock.It is ALWAYS has the highest bidder at the top of the screen
On the right side of the screen is the ASK/OFFER side which is what someone is willing to SELL that stock for.This side ALWAYS shows the LOWEST offer at the top of the screen
Underneath each of these high bids/low offers....are ALL the other MM's/ECN's as well as any other qualified broker/dealer interested in that stock (or have a particular order to buy or sell that stock) in decending dollar amounts from HIGH to low on the BID side.....and LOW to HIGH on the offer side
Along side the dollar amount of each bid/offer...is the shares/size available,which is usually in lots of 100's or 1000's
The colors you are seeing are actually used to show price/size levels,and can be 'SET-or Adjusted" by you into groups...so as you get good/better at reading Level ll.....you will quickly distinguish a stock rising or falling
On the BOTTOM(or top depending on the software) of the Level ll is your order entry system in which you can place your buy/sell/short/stops/conditional orders/etc
This is a VERY basic start...but Id be happy to answer any other specific questions you may have