2025 Advanced Guide to US Stock Trading: What is Level 2 Data and Software Choices

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Traders sometimes see a stock price surge instantly without understanding the buying and selling forces behind it. Level 2 data provides the answer for this. It is a “market depth” data displaying real-time buy and sell order queues. Unlike Level 1 data, which only shows the best bid, Level 2 reveals order volumes at multiple price levels. Excellent US stock software can provide this depth data, helping traders gain insight into the full market picture.

Key Highlights

• Level 2 data displays the complete buy and sell orders for stocks, helping traders see the real situation deep in the market, while Level 1 only shows the best buy and sell prices.
• Level 2 data can help traders find stock support and resistance levels, understand large fund movements, and make better trading decisions.
• Moomoo and Webull provide free or low-cost Level 2 data, suitable for beginners and intermediate traders; Tiger Brokers and Interactive Brokers offer more professional services.
• Level 2 data mainly helps short-term and day traders; long-term investors usually do not need it.

Level 2 Data vs Level 1: Revealing Market Depth

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To become an advanced trader, understanding the differences between Level 1 and Level 2 data is crucial. These two types of data provide different levels of market transparency, directly affecting the quality of trading decisions. Level 1 is the basic view, while Level 2 uncovers depth information beneath the market surface.

Level 1 Data: Only Shows Best Buy and Sell Prices

Level 1 data is the most basic and standard quote data accessible to all investors. It provides traders with an instant snapshot of the market, but the information is very limited. Its core is the National Best Bid and Offer (NBBO), which is the current highest buy price and lowest sell price in the market.

Level 1 data usually includes the following core information points:

• Best Bid: The highest price buyers are currently willing to pay.
• Best Ask: The lowest price sellers are currently willing to accept.
• Bid/Ask Size: The number of shares waiting to trade at the best bid and ask prices.
• Last Price: The price of the most recent trade.
• Volume: The total number of shares traded that day.

In simple terms, Level 1 data can be summarized in the following table:

Key Point: Level 1 only tells you the current “best” trading opportunity, but you cannot see other orders behind it or understand the overall market supply and demand situation.

Level 2 Data: Complete Order Book

Level 2 data is completely different; it shows traders the complete order book. The order book is a dynamic electronic list that records in real time all buy and sell orders for a specific stock at various price levels. This provides traders with valuable market depth information.

A typical Level 2 order book includes the following structure:

• Buy Queue: All pending buy orders arranged from highest to lowest price. The highest bid is at the front.
• Sell Queue: All pending sell orders arranged from lowest to highest price. The lowest ask is at the front.
• Order Size: The total number of shares the market is willing to buy or sell at each specific price level.
• Real-Time Updates: The order book changes dynamically. Whenever a new order is submitted, executed, or canceled, the list updates immediately.

Through Level 2, traders no longer see just one best quote but can view order distribution at typically the top and bottom 5 to 15 price levels. This allows traders to assess supply and demand strength at specific price points.

Core Data Sources: Nasdaq and ArcaBook

Level 2 data is not from a single source; it is provided by major exchanges and electronic communication networks (ECNs). Among them, the most famous two data sources are Nasdaq TotalView and NYSE ArcaBook.

• Nasdaq TotalView: This is the top-tier data service for Nasdaq-listed stocks. Unlike basic Level 2 that only shows a few levels of quotes, TotalView aims to display the complete order book depth for Nasdaq stocks. In theory, it provides 20 times more liquidity data than standard Level 2, allowing traders to see all public orders at every price level.
• NYSE ArcaBook: This is the depth data source for stocks listed on the New York Stock Exchange (NYSE). It similarly displays multi-level buy and sell orders, helping traders analyze supply and demand for NYSE stocks.

Choosing a powerful US stock software usually means it can integrate and clearly display depth data from these core sources.

From Quotes to Order Size: Core Elements Comparison

The fundamental difference between Level 1 and Level 2 lies in what they reveal about “who” is trading and “how strong” the trading intent is.

1. Quote Providers In Level 1 data, traders can only see an anonymous best quote. But in Level 2 data, each order is usually accompanied by a market participant identifier (Market Maker ID, MMID). This is a three- to four-letter code used to identify the broker or market maker placing the order.

For example, you might see the following codes:

• GSCO - Goldman Sachs
• MSCO - Morgan Stanley
• JPHQ - J.P. Morgan
• ARCA - NYSE Arca platform
• EDGX - CBOE exchange

By observing which institutions are actively buying or selling, experienced traders can infer whether current market behavior is driven by retail or institutional investors.

2. Order Size Order size is the most practical part of Level 2 data. Level 1 only shows order size at the best price, while Level 2 reveals order accumulation at multiple price levels.

A large number of buy orders gathering at a certain lower price forms a “buy wall,” usually seen as a potential support level. It indicates strong market willingness to prevent the price from falling below that level.

Conversely, a large number of sell orders accumulating at a certain higher price forms a “sell wall,” usually seen as a potential resistance level. It indicates strong selling pressure that may prevent further price increases.

By analyzing the distribution and changes in these order sizes, traders can more accurately judge whether market sentiment is bullish or bearish, thereby making wiser trading decisions.

Practical Value of Level 2: From Data to Trading Decisions

After understanding the composition of Level 2 data, the real challenge is how to turn it into executable trading decisions. Level 2 data provides traders with a microscope to observe the market’s internal microstructure, gaining an edge in practice.

Identifying Key Support and Resistance

The most intuitive use of Level 2 data is to identify potential support and resistance levels. When a large number of buy orders gather at a certain price point, it forms a “buy wall.” This wall indicates strong buying willingness in the market, capable of preventing the stock price from falling below that level, thus forming a strong support.

For example, the order book shows 100,000 shares of buy orders at the $50.00 price level. This usually means $50.00 is an important psychological and technical support point. Traders will closely watch the price reaction when approaching this level.

Conversely, a large number of sell orders accumulating at a certain price point forms a “sell wall,” constituting significant resistance. However, traders also need to combine other technical analysis tools to verify these signals, to guard against interference from fake orders.

Tracking Large Fund Movements

Market participant identifiers (MMID) in Level 2 data provide clues for tracking large fund movements. By observing which institutions are placing large orders, traders can judge whether current market behavior is retail-driven or institution-dominated.

Additionally, institutions sometimes use “iceberg orders” to hide their true intentions, displaying only a small portion of order size. If traders find small orders at a certain price continuously absorbing large opposite orders, this is likely an institution quietly building or unloading positions.

Judging Price Breakout Validity

The imbalance state of the order book is a powerful indicator for predicting short-term price direction. When the stock price approaches a key resistance level, traders can observe changes in buying and selling forces through Level 2 data.

• Valid Breakout Signal: If sell queue order size gradually decreases while buy queue order size increases, this indicates weakening selling pressure and strengthening buying momentum. This imbalance increases the likelihood of an upward breakout.
• Failed Breakout Signal: If the price repeatedly impacts a certain resistance level but sell orders not only do not decrease but are continuously replenished, this foreshadows a potential breakout failure.

This analysis allows traders to judge breakout validity earlier than just looking at K-line charts.

Optimizing Order Price and Timing

Level 2 data helps traders more precisely choose order timing and price. By observing liquidity distribution in the order book, traders can decide whether to place limit orders in dense liquidity areas to ensure execution or in sparse areas for better prices.

For example, a momentum trader might place a buy order slightly above a surging buy area to follow the market trend. Similarly, if buy bids generally start declining, indicating increased short-term bearish sentiment, traders might set their buy limit orders at lower prices. An excellent US stock software can clearly visualize this data, helping traders make quick judgments.

Mainstream Level 2 US Stock Software and Broker Comparison

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Choosing a suitable US stock software is key to effectively using Level 2 data. Different brokers and software have significant differences in fees, data depth, and platform features. Below is a detailed comparison of four mainstream platforms to help traders find the tool that best suits them.

Moomoo: Free Quotes and Community

Moomoo stands out in Level 2 quote services with its core advantage of free Nasdaq TotalView depth data for eligible customers. This is a huge highlight for investors wanting to reduce trading costs.

Free Conditions: To obtain free Level 2 quotes, users usually need to meet specific requirements. For example, Moomoo Financial Inc. accounts need to meet the following:

• The account’s average daily asset value in the past 30 days at least $100.
• Asset value includes cash in the account and investments like stocks, ETFs, and options.
• The platform may have other applicable terms.

Moomoo’s data services are not limited to Nasdaq stocks; it also provides depth data for NYSE-listed stocks, helping users comprehensively analyze the market. In addition to powerful data support, Moomoo’s platform features an active investment community. Users can exchange trading insights in the community and observe others’ portfolios, providing additional reference for trading decisions.

• Fees: Free after meeting conditions
• Data Depth: Provides complete Nasdaq TotalView data
• Platform Features: Powerful community functions, active user exchanges, friendly charting tools
• Suitable For: Cost-sensitive short-term traders, investors wanting inspiration from the community, and US stock beginners

Tiger Brokers (Tiger Trade): Integrated Trading Experience

Tiger Brokers (Tiger Trade) is committed to providing a one-stop global investment experience. Its Level 2 data service is considerable in depth, with information showing it can provide up to 40 buy/sell levels, allowing traders to gain insight into deeper market liquidity.

Regarding its pricing model, it is relatively flexible. Tiger Brokers may provide free Level 2 data based on user region, account assets, or specific promotions. For example, for users in certain regions, the platform automatically grants Hong Kong stock L2 depth quotes. For US stock Level 2 data, subscription fees and specific policies suggest users directly check the purchase page for the most accurate information.

Tiger Brokers’ advantage lies in its smooth trade execution and well-integrated platform features, covering stocks, options, futures, and other products. This US stock software is designed to let users complete all operations from analysis to trading in one app.

• Fees: Paid subscription or conditionally free based on activities/regions
• Data Depth: Up to 40 buy/sell levels
• Platform Features: One-stop trading experience, wide product coverage, smooth interface operations
• Suitable For: Investors pursuing efficient trade execution and wanting to manage global assets in one platform

Interactive Brokers (IBKR): Choice for Professional Traders

Interactive Brokers (IBKR) is the preferred platform for professional traders and institutions. Its Level 2 data service is part of its powerful trading ecosystem, usually requiring paid subscription. IBKR provides not just data but a complete set of professional analysis tools built around data.

Traders choosing IBKR value its unparalleled professional features. These features combined with Level 2 data can maximize power:

• Advanced Charting Features: Provides over 100 technical indicators and drawing tools for in-depth analysis.
• Comprehensive Fundamental Data: Through its Fundamentals Explorer tool, access detailed financial data for global companies.
• Complex Options Analysis: Built-in Options Lattice, Options Analysis, and other tools to formulate complex options strategies.
• Powerful Screeners: Users can search for trading opportunities in vast markets based on custom filters.

IBKR’s Level 2 data service is designed for serious traders needing ultimate speed, depth, and analysis capabilities.

• Fees: Usually paid subscription
• Data Depth: Provides complete exchange depth data
• Platform Features: Top-tier trading tools, powerful API interfaces, extremely low margin rates
• Suitable For: High-frequency traders, professional day traders, algorithmic traders, and investors pursuing ultimate professional features

Webull: Clean Interface and Low Threshold

Webull provides a very flexible and low-threshold solution for Level 2 services, successfully balancing beginners and advanced traders. Its interface design is clean and modern, easy to use.

Webull offers all new users one month of free Nasdaq TotalView Level 2 quotes experience. After the trial period, users can choose multiple subscription plans:

• Subscribe to Nasdaq TotalView alone, monthly fee about $2.99.
• Subscribe to Webull Premium service, monthly fee about $3.99, which includes free Level 2 data.

Webull’s Nasdaq TotalView data displays up to 50 buy/sell levels, with considerable depth. This allows users to access professional-level data at low cost.

Note: Activating Level 2 data usually requires users to fill out a questionnaire to confirm non-professional trader status. Payment for subscriptions is handled through third-party platforms like PayPal or app stores.

• Fees: First month free, then low-cost subscription options
• Data Depth: Nasdaq TotalView provides 50 buy/sell levels
• Platform Features: Clean and friendly interface, flexible subscription plans, paper trading functionality
• Suitable For: US stock beginners, intermediate traders wanting to try Level 2 data at low cost

Level 2 data provides traders with market depth vision beyond basic quotes. It is a powerful tool for executing short-term strategies like order book imbalance scalping.

However, Level 2 is not suitable for all investors. For long-term value investors, its necessity is relatively low.

Traders should choose based on their trading style, frequency, and budget, referring to the software reviews in this article, to make informed choices and truly turn Level 2 data into a trading advantage.

FAQ

Do All Traders Need Level 2 Data?

Level 2 data is not necessary for everyone. It mainly helps short-term and day traders with precise timing. For long-term value investors, Level 1 basic data is usually sufficient. Traders should decide whether to use it based on their trading style.

Does Getting Level 2 Data Require Payment?

This depends on the broker platform. Some platforms like Moomoo provide it free for eligible users. Webull offers low-cost subscription plans. Professional platforms like Interactive Brokers (IBKR) usually require paid subscription.

Are All Orders in Level 2 Data Real?

Not entirely. Traders sometimes place fake orders (Spoofing) to create false supply and demand signals. Therefore, traders need to combine volume and price trends for comprehensive judgment to avoid being misled by “buy/sell walls.”

What is the Most Important Information in Level 2 Data?

“Buy walls” and “sell walls” in the order book are key information. They show large orders gathered at specific price levels, helping traders identify potential support and resistance levels, thereby judging market sentiment.