Level II Market Data

What’s Level II Market Data?

We’ve partnered with Nasdaq to give Robinhood Gold members access to Level II Market Data powered by Nasdaq Totalview.

Level II Market Data shows more than just the best bid and best ask on the market: it also shows the full depth of orders on the market, including aggregated quantities at the individual bids and asks. This can help investors gauge the availability or desire for a stock at a certain price. Bids are limit buy orders that other investors have open on the markets. Similarly, asks are limit sell orders from other investors. Like any limit order, each bid and ask is represented by the price and quantity of the order.

Note

Level II Market Data does not show all orders. Only orders from market participants directly on the Nasdaq stock market will appear on the Level II chart, so Level II Market Data may not include data on orders from other stock markets, trading venues, brokers, or Robinhood.

How do investors use Level II Market Data?

Level II market data gives investors more information which 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 quantities, and prices as a possible indication of the short term direction of the price, alongside other indicators.

Investors can use this data in conjunction with other indicators and information and analysis, such as the price chart representing recent trades. You can find the price chart for a stock on Robinhood on the stock detail page.

How is this related to the main price chart?

The price chart on the stock detail page represents the prices of recent trades on that stock. On the other hand, Level II Data represents a current snapshot of resting limit orders (the different bids and asks) for that stock. If one of the open orders on the Level II chart executes, it will 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 Market it will appear on the Level II Chart as a bid. Later, suppose this Nasdaq order executes—it will then drop off the Level II chart and instead will appear as a datapoint on the main chart at its sale price.

How is this related to the Bid and Ask Spread?

The highest bid and the lowest ask form the bid/ask spread. These represent the best displayed prices to buy or sell a specific stock on the market. The gap between the best bid and the best ask is called the spread or bid-ask spread. 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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Disclosures

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, experience, risk tolerance, and financial situation.

For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.

Reference No. 1389260
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