The Difference Between Level I & Level II Stock Trades

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The difference between level one and level two stock trades is that the information from level two stock trades is much more in depth than level one. Use level two stock quotes for day trading and level one stock quotes for long-term investing with advice from an investment portfolio manager in this free video on investing and personal finance.

Part of the Video Series: Investing & Retirement Funds
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Video Transcript

So what's the difference between level one and level two stock trades? The trades are very much the same. The difference between level one and level two stock really is in the quotation and the ability to look at the stock and look at what's going on with it. Level one will give you a basic quote. Will give you all the basic information and really give you what you need to know about the stock at that given time and level one is suitable to make some transactions. Now level two is a step above that and level two will actually give you many times called streaming quotes. That will give you information that is changing as it's actually changing on the market floor and you'll be able to see the bid and ask prices going up and going down. You'll be able to see whether that stock is actually trending upward or trending downward and that will be based really not on the price that your looking at but you'll be able to see symbols and representations on the screen. That will show you how many of the last trades have been positive. How many of the last trades have been negative. Or dead even. So level two gives you much more information and some of the better trading platforms online. Do offer level two streaming quotes. Now there is also a level three but that's also, that's only available for professional market makers. The exchange floor. So really level two gives you more than enough information and for most people even level one is enough for doing longer term investing. If you doing more of day trading type of investing you'll want to work with the level two quotes.


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