Free Structure Quote Garages Barns Guard Towers

◊ Free Structure Quote

A financial quotation refers to specific market data relating to a security or commodity. While the term quote specifically refers to the bid price or ask price of an instrument, it may be more generically used to relate to the last price which the security traded at (“last sale”). This may refer to both exchange-traded and over-the-counter financial instruments.

Bid and Ask

The bid price (also known as the buy price) and the ask price (also known as the sell price) of a security are the prices (and often quantities) at which buyers and sellers are willing to purchase or sell that security. The bid shows the current price at which a buyer is willing to purchase shares, while the ask shows the current price at which they are willing to sell. The quantities at which these trades are placed are referred to as “bid size” and “ask size.” For instance, if a trader submits a limit order to buy 1000 shares of MSFT at $28.00, this order will appear in a market maker for MSFT’s book with a bid of $28.00 and a bid size of 10.

Equities

Level 1 Access

Level 1 quotations represent realtime bid/ask data, the most commonly displayed market data. Level-1 data typically will display the Best-Bid-Offer (“BBO” or “Inside Quote”), i.e. the lowest ask and highest bid available at the time

Level 2 Access

Level 2 data displays the best bid and ask prices (also known as “top-of-book”) for each market participant in a given security. In other words, at a given time there may be severalmarket makers participating in trade matching for a specific stock. Level 2 data will display the highest bid and lowest ask for each individual market maker.

Level 2 information is of interest to traders and brokers because it indicates the buying and selling pressure behind individual securities.

Similar in format to live streaming share prices, a typical Level 2 screen is split in two vertical halves and will show orders on both the bid price of a security (left hand side) and the offer price (right hand side).

On major, heavily traded stocks the “depth” of the orders can quite often be in excess of 20/30 orders to both buy and sell at lower (left) and higher (right) prices.

Traders can use this information to predict the short-term movement of a share or security in conjunction with volume traded, and attempt to profit from this information, which is usually legal as the information is in the public domain. The reason for this is that Market Makers sit “behind” such a screen by being obliged to both buy and sell the share at the posted price up to what is known as normal market size.

For certain market centers such as NASDAQ, a full depth-of-book (DOB) is available, whereby every quotation for every market participant is displayed.