Re: LEVEL 221 May 2007 14:55
Hey stockspy.
Dunno what you lot have been doing to the shares I hold, but just got back from a meeting (out at half nine) and my entire holding has gone up 5.4% on the back of good rises in TAN, LNG, AU and VIY. I should get invited to these dull meetings more often!
Anyway, level 2 show more detailed information regarding share trades. If we take a share like LNG then level 1 (the basic level of data) shows that the durrent price is 22.5-22.75p and gives me other figure like 73 bargains and 1.2m shares traded. But switching to level 2 offers up more information, so I can see that there are 5 market makers offering prices, just one of these is bidding 22.5p (the rest lower) and just one offering 22.75p (the rest higher). We call this 1-1 as there is just the one market maker at the best bid and one at the best offer price. Level 2 can really help in a rapidly traded share as for example it might show 5-1, meaning all 5 market makers are at the same bid price, which suggests that the next time any of them get a decent buy order the bid will increase.
If you look at a share like TAN, this trades on SETS, which matches buyers to sellers more accurately. This system has the benefit of showing orders in the system, as well as volume, so I can see that someone is offering to buy 10K TAN shares at 142p and someone else is offering to sell 6.8K TAN shares at 142.5p, hence the current spread of 142-142.5p. It also offers up volumes of buys and sells in the system, which ca