What’s Level II Market Data?
We partnered with Nasdaq to give Robinhood Gold members access to Level II Market Data powered by Nasdaq Totalview.
This data shows multiple bid and ask prices from Nasdaq for any given security so investors can better determine the availability of and interest in a security at a certain price. For Nasdaq, bids are functionally equivalent to limit buy orders that other investors have open on the markets. Similarly, asks are functionally equivalent to limit sell orders from other investors. Like any limit order, each bid and ask is represented by the price and quantity of the order.
Level II data is unique because it shows more than just the best bid and best ask on the market. It also shows the full depth of the orders on the market, including quantities at the individual bid and ask prices.
Level II market data only includes orders from Nasdaq stock market participants. It doesn’t include data on orders from other stock markets, trading venues, brokers, or Robinhood.
You can find Level II Market Data for securities traded on Nasdaq within your Robinhood account:
This data gives investors more information that they can incorporate into their investment decisions and analysis by showing more detail about the bids and asks on the Nasdaq stock market.
For example, some traders compare how many shares are on each side of the market, the volumes, and prices as possible indicators of the short-term direction of the price, alongside other indicators.
Investors can use this data in conjunction with other technical indicators and analysis, such as the price chart representing recent trades.
The main price chart on the security's detail page represents the prices of recent trades on that security. The Level II price chart represents a current snapshot of the resting limit orders (the different bids and asks) for that security. If one of the open orders on the Level II chart executes, it'll become a trade and appear as a data point on the price chart.
For example, suppose an investor places a limit order to buy 10 shares of a given stock at $100. While the order is pending, if the order rests on the Nasdaq stock market, it'll appear on the Level II chart as a bid. Later, suppose this Nasdaq order executes—it'll then drop off the Level II chart and will appear as a datapoint on the main chart at its sale price.
The difference between the bid price and the ask price is called the bid-ask spread. The bid price is the highest price that a buyer is willing to pay for a security, and the ask price is the lowest price a seller is willing to accept for a security.
Level II data goes beyond showing just the best bid and best ask on the market by showing the full depth of orders on the market, including aggregated quantities at the individual bids and asks.
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