Stock quotes you see on TV, or online after work are most likely the closing price of a particular stock for that day. This information may be useful when you are investing in this stock market, but it doesn’t tell the whole story. If you are a long term investor this type of quote is probably just fine, but if you want to trade stocks; especially penny stocks, this type of quote won’t be practically enough for you to be successful…
Level I Stock Quotes
Level 1 stock quotes are similar to what you see on the TV stock channels, or in the newspaper, the only difference is that they are in real time. Level 1 provides you with the current highest bid and the lowest ask price. This type of stock quotes is easy to find and it doesn’t require a lot to get this info or any special trading software and tools.
Level II Stock Quotes
Level II stock quotes are more detailed; you get to see the order size, time of the transaction occurred and it also show you the market maker. This can help your trading strategy. For instance, some market makers, their sole purpose is selling. So most likely the stock price will drop when there is too much selling. Also you will be able to see how much other market makers are buying, and so you’ll be able to level it off. Yes, on a level II stock quotes you are able to see any market maker’s buying and selling activity. You can find this type of information, level II, through your brokerage company.
Level III Stock Quotes
As you probably already guess, level III stock quotes include everything from both level I and II quotes. Only, they allow you to execute selling and buying orders and send the data straight to the market makers, brokers and the exchanges. Level I and level II stock quotes are filtered from this data. Access to level III stock quotes can help your trading strategy if you are into trading penny stocks. If you are new traders, I know it ‘s a lot of information to consume, and sometimes will seem overloaded, but that is a small price to pay if you want to make thousands or millions on penny stocks.
So Which Is Best?
The best stock quotes system will vary depending on what you want to achieve and what type of stock you are trading. If you are trading penny stocks which are volatile and risky you will want as much information as quickly as possible. In this case level III or at least level II stock quotes is a must. If you are a long term investor, that you are holding on to stocks for a very long time you probably only need quick checks on the daily closing price.
A lot of information is not always the best case scenario when trading stocks, how quick you have them is more efficient. Before you decide to overload yourself with lots of information, it’s best to know which type of best fits you.