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

GL,
Stephen

I just got in on Scottrade Level II, myself. It's pretty eye opening. Even though I mostly stick to the NYSE. Naz Level II has confirmed my belief that the best way to handicap the market is to try and figure out the Specialist/MMs attitude towards their inventory. Basically, every big Naz stock has the same group (cartel) of MMs. Here's the top 10 for Intel, not exactly mom & pop operations:

Morgan Stanley, UBS, Goldman, Lehman, Citadel, Merrill Lynch, BoA, Citigroup, JP Morgan, Deutsche Bank, Credit Suisse, Bear Stearns

good post thanks! are there certain mm's or ecn's or b/d's u pay more attention too or are they all pretty much the same? also are u looking for the bigger trades? for instance i was watching UA the other day and saw a ton of 100 shares being traded with occasional bigger sized ones in the thousands, so should i ignore all the little trades and see how the big blocks are moving the stock?

Level II looks more like a way to take your stock gambling onto the next level. I had it as a free trial but never used it. I imagine the early adopters found a significant edge when it was available to punters a few years back, but I suspect that any edge has been significantly eroded since then.

Stephen, I don't trade intraday, but I would assume someone who did would be at a disadvantage if they didn't have access to level II. Can you maybe give a brief outline as to how a daytrader would use this data to improve their edge. I assume it would facilitate finding the location of significant points of potential support/resistance?

Level 2 is not as useful as in the past, partly because almost everyone has it now, and partly because of the consolidation of Instinet/Selectnet/Island over the years. These days if you want some nasdaq stock, you just put in a limit order, and that's it.

L2 is sometimes fun to watch as people try to play games with false bids to represent strength and like that. Also, with all the consolidation, nobody shows real size anymore. If someone wants 10k shares, they usually show 100 or 1000 shares and set it to refresh if their bid is filled. The time L2 is really useful is pre and after market hours.

L2 is sometimes fun to watch as people try to play games with false bids to represent strength and like that. Also, with all the consolidation, nobody shows real size anymore. If someone wants 10k shares, they usually show 100 or 1000 shares and set it to refresh if their bid is filled. The time L2 is really useful is pre and after market hours.

this is interesting

How can you determine that shorts are trying to cover using level 2 rather than genuine desire to buy long?