How do you use Level 2 data?

Another way to use Level 2 data is to identify potential areas of support and resistance for a stock. To identify support and resistance levels, look for unusually large order sizes at a particular price level. For example, say a stock that normally trades in lots of 1,000 shares shows an outstanding order for 100,000 shares at a particular price.

What is Level 2 stock data?

Level 2 stock data shows all of the orders that have been placed at prices below the best bid price or above the best ask price. These are limit orders that could be executed if the price of a stock were to fall or rise. Level 2 data is also known as order book or market depth data because it reveals the full range of existing orders for a stock.

What is Level 2 market data?

Level 2 market data shows the price of the quote offered by each market maker. These bid and ask quotes are below and above the current national best bid and ask prices and are shown at regular intervals. For example, if a stock’s national best bid price is $10.00, Level 2 data may show quotes at $9.90, $9.80, $9.70, and so on.