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To view Level 2 data on a particular
stock, enter the symbol in the white box in the upper
left hand corner of the window and press Enter on your
keyboard.
At the top of the window, Level 1
data is displayed, including symbol, company name,
last trade, etc. Above the Level 1 data you will see
summary quotes for the major US Indices - the Dow Jones
Industrial, the Nasdaq Composite and the NYSE Composite.
Right-clicking on these quotes will allow you to open
a chart on that index if you wish.
The main part of the Level 2 window
features the Market Maker (MM) windows, in two separate
panes, as well as a Time & Sales window. In the MM
windows, the left-hand window displays the Market Maker
ID's, their Bid prices on a stock, the size of the
offer and the time it was entered, while the right
displays the current Ask price data. The offers are
grouped into different colors, by price. The colors
mean nothing on their own; they merely serve to separate
the price levels, for ease of viewing.
If you right click on the Level 2
applet, you will see a menu appear that will allow
you to Hide or Show the indices at the top and to change
the Colour, Font Size and Flash Type of the applet.
As well, you can click on the column headers with down
arrows on them to open a menu that allows you to change
what data is displayed in that column. Once you have
the applet configured how you like it, right-click
and select Save Preferences to make the applet open
that way each time.
Also on the right-click menu are links
to let you open a Chart on the stock currently being
viewed, to see a searchable Time & Sales window, to
check Current and Historical News and to see the discussion
forum for that stock on several major stock online
Message Boards. To see the name and contact details
of the individual Market Makers, select Market Makers
IDs on the right-click menu.
Between the two MM windows is a color-coded
reference band. This can be used to quickly gauge the
strength of the market in a particular stock. At the
top of the Market Maker windows is a summary of the
current Best Bid and Ask, and the total aggregrate
displayed size (including Exchange quotes)
The Time & Sales displays the individual
trades of the stock being viewed as they happen. Trades
in green text represent an up-tick, red text for down-ticks
and white for same price. A trend indicator is shown
above the Time & Sales window. This gives you a quick
visual summary of the previous 40 trades. The same
colour scheme is used here: Green for uptick, Red for
downtick and white for neutral.
A blue flash indicates a Market Maker
who has changed his position.
Level 2 data is a sophisticated investment
tool used to determine market strength. In basic terms,
strength is determined by the number of MMs at each
price level. If the bid side has only one MM per price
level (color) while the Ask side has multiple MMs at
each price, then the stock price is likely declining.
(Many sellers and few buyers produces downward pressure
on price). Conversely, if there are many MMs at each
Bid price, and only one or two at each Ask price, the
stock is rising in value.
This can be combined with the Trade
Summary. Trades at the Bid price represent sells, while
trades at the Ask price represent buys. If the majority
of the trades are sells, there is downward pressure
on the price, while many buys would indicate upward
pressure.
Pink Sheets Legend
BW — Bid Wanted
OW — Offer Wanted
Unpriced — Market Maker is interested
in the stock but has not given a price and size
Some stocks will not have a best bid
and ask. To display the best bid and ask there must
be two Market Makers with priced orders. If they're
Unpriced, BW or OW, the best bid and ask will be blank. |
