Mastering Advanced Level 2 Quotes for US Stocks

Picture this: a tool that empowers you with the ability to see every single pending order for a stock out there in the market, including the volume of shares, and the order prices, and even have it automatically tally the total number of orders at each price level for you.

With this tool at your fingertips, think about how much more informed your trading decisions could be. And guess what? It's a real possibility, thanks to Level 2 real-time streaming quotes on moomoo.

What's Level 2 Streaming Quotes for US Stocks

Level2 Streaming Quotes

Let's dive in and explore how it works！

Level 2 quotes offer a live feed of market orders, constantly updating with data throughout trading hours. It's a lot to take in at first, especially for newcomers.  Actually, things aren't as difficult as we imagined!  

In this video, we'll show you some tips for getting the hang of Level 2 quickly. Let's see how they work in action.

Open moomoo and navigate to an individual stock's quotes page.

Here's what we'll find:

The yellow-framed section displays Level 1 quotes. With Level 1, we can see the real-time stock price, detailed individual transaction orders, and the current closest pending orders to the market price, which are the best bid and best ask.

Now, shift your eyes to the blue-framed section. That’s where the Level 2 quotes live. This is also known as the Order Book. It's brought to life with a dynamic line chart and a table, highlighted in shades of red and green.But what do all these colors and numbers mean?

The green section is the "Bid" area, showing the buy orders waiting to be filled. Conversely, we have the red section — the "Ask." This is where you'll find sell orders lined up. The numbers in the middle indicate the order prices.

On the right, the numbers tell us how many shares are in play. For example, in this snapshot, the "best bid" data point shows that there are a total of 325 shares pending purchases at the quoted price of 180.28 in two different streaming quotes. And those four-letter codes at the start? They're the exchanges. Notice the best bid/ask might differ across Level 1 and Level 2 because they're from different sources.

When you see differing bid or ask prices between Level 1 and Level 2, rely on the price that's closer to the market's price. Moomoo offers six types of US stock Level 2 streaming quotes, each one sourced from a different exchange. Unlocking various US stock Level 2 quotes expands your market insight, giving you a piece of additional information with more wide-ranging data.

If you're looking to expand your trading toolkit, simply click on the little "house" icon next to the depth order book.

How to use Level 2 Quotes?

You might wonder how to leverage Level 2 streaming quotes in real trading. Let's look at two common applications.

1. Basic use: streamlining your trades

Using the Level 2 order book might help you place your trades smarter, boosting your chances of quick execution. For example, take a look at the Level 2 quotes for a stock. Suppose you think the company's stock price may face resistance soon, and you want to sell some shares now to lock in profits.

Using the Level 2 quote information shown, we see that the current best bid price from NSDQ is 20.53. This means that if you want to sell your shares quickly, setting an order at 20.53 or lower stands a good chance of immediate execution.

If you prefer to sell shares at 20.55 for 100 shares, your order could become the new best ask if there are no lower-priced sell orders at that moment. Keep in mind that orders placed through moomoo might be routed to exchanges other than ARCA or NSDQ, so your order may appear in the Level 2 quotes of other exchanges.

2. Advanced Use: Identifying Short-Term Support and Resistance

Level 2 quotes can be a powerful tool for identifying short-term price movements. Sounds pretty complex? The truth is, it's quite straightforward. It boils down to spotting larger orders within the order flow.

For instance, in this snapshot, you can immediately see a significant accumulation of orders at the buy side at $13.38. This suggests that if the stock price dips to these levels, it may find temporary support as the market absorbs these buy orders before it can drop further.

Conversely, large sell orders, like those we see in our screenshot, could indicate potential short-term resistance levels.Keep in mind, Level 2 only shows live, unexecuted orders, which can be canceled at any time.

So, it's wise not to rely solely on Level 2 for your trading decisions. Also, remember that a single Level 2 quote doesn't reflect all market order flow, just the activity for that particular exchange. To get a more accurate assessment of orders that might provide support and resistance, consider subscribing to Level 2 quotes from additional exchanges.

Practical tips for quickly analyzing Level 2 quotes

When we trade with Level 2 quotes in practice, it can be challenging:

popular stocks have prices that change so rapidly during trading hours, that it can be overwhelming. To cope with this, here are some tricks to help us "glance and grasp" the situation on the board.

1. Depth chart

Beneath the best bid and ask, you'll find the depth chart. This chart updates in real-time and helps you quickly determine the balance of power between buyers and sellers, making short-term support and resistance zones more apparent.

When analyzing this chart, remember two key points:The green and red sections symbolize buy and sell orders, respectively. A larger area signals stronger pressure for the stock at that moment.

The horizontal axis of the chart represents stock prices, while the vertical axis shows the cumulative number of outstanding orders. A steeper line indicates a larger increment of orders. For example, in our screenshot, there's a nearly vertical line. Long-pressing on the chart brings up crosshairs revealing specific data points.

At a horizontal coordinate of $122.33 and a vertical coordinate of 12.87K, it shows that there are a total of 12,870 shares in sell orders at or above that price on the ARCA and NSDQ exchange, with a significant number of orders accumulating at $122.33 – suggesting that this price could be a short-term resistance level.

2. Order book settings

Click the second icon to tailor how information is presented.

- Turn on "Color Stripes" to easily distinguish buying and selling zones with color-coded price levels.

- Enable "Order Size Bar" to view a histogram that highlights where big orders are located at each price level.

- Use the "Aggregate by Price" option for a consolidated view of orders at the same price point, or turn it off to assess each order individually, as shown below.

From May 1, 2024, to July 31, 2024, every registered moomoo user will get free access to Nasdaq TotalView's streaming quotes, a service that normally costs $77.97.* Nasdaq TotalView — the standard Nasdaq data feed for informed traders — displays the full order book depth on Nasdaq, including every single order at every price level in Nasdaq-, NYSE-, NYSE American- and regional-listed securities trading on Nasdaq.

Nasdaq TotalView provides a comprehensive view and insights into the market demand and supply. Official data from Nasdaq indicates that  Nasdaq TotalView quotes are closer to the National Best Bid and Offer with a narrower average bid-ask spread for the constituent’s stocks of 3 mainstream U.S. indexes, rather than other quotes.

Experience the power of Nasdaq TotalView with moomoo, a gateway to insightful market depth and precision. Moomoo brings this advanced trading tool to life with an intuitive interface, empowering you to make smarter, more informed decisions.

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