Glossary
Level 2 quotes
A market-data view showing the bids and asks at several price levels beyond the best quote, with the size at each.
On this page
Level 2 is a market-data display that shows more than the best price to buy and sell. A standard quote, often called Level 1, gives only the highest bid and lowest ask with their sizes. Level 2 adds the queue of bids below the best bid and asks above the best ask, price level by price level, often with the exchange or market participant posting each one. Active traders use it to judge how much size a stock can absorb and where buyers and sellers are clustered.
How to read it
The screen has two columns: bids on the left, sorted from highest down, and asks on the right, sorted from lowest up.
What it does not show
Level 2 is only a partial picture. Many orders are hidden: exchanges allow non-displayed orders and "iceberg" orders that show a fraction of their real size, and a large part of US volume executes off-exchange in dark pools and with wholesalers. Displayed orders can also be cancelled in milliseconds; posting large orders with no intention of letting them fill, to mislead others, is illegal spoofing. Depth that appears and vanishes is common in fast markets. Treat Level 2 as a snapshot of stated intentions, not a promise of where trades will happen.