Level II Stock Quotes

People who have a serious interest in the minute-by-minute goings-on of the stock market would hardly be content with staring at the ticker tape on Bloomberg. Getting real-time stock quotes aren't enough. That's only Level I. They've got to have access to Level II. While Level I provides the stock prices, Level II features the bid and ask orders of individual trading participants.

There are basically three types of players in the stock market: the market makers which are the big banks and investment companies, the Electronic Communication Networks (ECN) which are computerized systems that execute market orders, and wholesalers or order flow firms which execute orders on behalf of retail traders.

Just as a company is identified by a ticker symbol, so is a market player identified by a four-letter ID. Some of the most well-known ones are MSCO for Morgan Stanley, MLCO for Merrill Lynch, and JPHQ for JPMorgan.

In the Level II stock quotes, you can see the stocks that the market participants are bidding for and their bid prices. You can then know whether a particular stock is attractive to institutional buyers or retail traders. Since the ECN is open to anyone, it can also be used by institutional traders who want to keep a transaction quiet so better look out as well for noticeably large order sizes.

Level II stock quotes can provide you with a wealth of information but you would do well to remember that these data can be manipulated by other parties to suit their agenda. You should then be wise and masterful enough to distill the information you get and consult other sources as well in order to develop a more effective trading strategy and make an intelligent investment decision.