Level 2 Quotes
Real-time market data showing all pending buy and sell orders across multiple price levels in an exchange's order book.
What is Level 2 Quotes?
Level 2 quotes (also called depth of market or market depth data) display the full stack of bids and offers at multiple price levels, revealing not just the national best bid and offer (Level 1) but also the size and price of every queued order behind the best quote. Active traders use Level 2 data to gauge supply and demand imbalances, locate large order clusters that may act as near-term support or resistance, and anticipate short-term price movements before they happen. On Nasdaq, Level 2 shows individual market maker quotes and their sizes; on NYSE, it shows specialist and limit-order book data. Accessing Level 2 typically requires a direct-access trading platform or an additional data subscription.
Example
A day trader monitoring a stock at $50 sees on Level 2 that 80,000 shares are offered at $50.10 with very thin bids below $50.00. This supply-demand imbalance signals downward pressure, prompting the trader to wait for the large offer to be absorbed before entering a long position rather than buying into the ask.
Source: SEC — Regulation NMS