Level 1
Candlefocus EditorLevel 1 quotes made a big splash in the stock market with the advent of the internet and online trading. Now that investors can access these quotes for free, they can make investment decisions with more confidence and ease. For long-term investors that don’t care too much about small price movements, Level 1 quotes are often enough to make an informed decision.
However, for many active traders, Level 1 quotes are not enough because they look to capture much smaller gains. Thus, these traders prefer Level 2 quotes, which provide more data about the stock. Level 2 quotes often offer similar bid and ask numbers, but also allow investors to see price levels with the highest volume and the size of the volume at each price. In other words, Level 2 quotes provide a more comprehensive view of the market by showing what buyers, sellers and market makers are doing. For example, Level 2 might show a lower bid price than the Level 1 quote, suggesting that the market is still falling.
Overall, Level 1 quotes are a great starting point for stock trading, but may not provide enough data for the active trader. Level 2 quotes provide a much more detailed view of the market, allowing investors to make their trading decisions with more information than they could with Level 1.