As a trader you will learn to use Level 1 and Level 2 Stock Quotes. Below is a breakdown of the Levels. Level 1 will be a basic understanding while Level 2 will have more details for the Day trader.
Level 1 Quotes
Real Time Quotes on the bid and ask trading on the stock market. Level 1 does not disclose who is bidding (What Market Maker), or how many shares on the marked.
Bid are the prices people have openly expressed what price they are willing to Buy for the Stock.
Ask are the prices people have openly expressed what price they are willing to Sell for the Stock.
Check out the Day Trading Encyclopedia for definitions of whats on the Level 1 Quote.
Level 2 Quotes
Level 2 access provides real-time access to the quotations of individual market makers registered in every Nasdaq-listed security as well as the offering or bidding lots that they are looking for.
This level of access also gives the name of the market maker looking to trade the stock. It allows traders to see what market makers are showing the most interest in a stock and to identify the patterns for each market maker. Level II access is available over the internet – but at a cost. This can range in the hundreds of dollars per month depending on the company. For clients placing a large number of trades, the firm may waive the access fee because they will make up the costs on your commissions.
Level 2 Videos