Level 2 and DMA - The Benefits
Level 2 data shows all the bids and offers that have been lodged in the underlying market for a stock, giving the trader a number of advantages.
With our professional L2 Dealer platform you can view the full order book, examine supply and demand of orders, operate in anonymity and reap all the rewards of Level 2 trading.
View the full order book
A Level 2 screen (shown) reveals the full depth of the market for a stock. Crucially you can see the number of securities for sale and on offer; and the number of buyers and sellers at each price. Access to this information, combined with the ability to join the queue yourself using a DMA platform such as L2 Dealer, can lead to more informed trading.
Compare buying vs selling interest
Knowing how many bids are queued on either side of the order book can give insights into the possible future direction of a stock
Get inside the spread
Place your own orders in the queue and trade directly with other market participants by setting your own price - as a price maker you may get opportunities to trade within the normal spread
Time your trades
When placing large orders you can account for market liquidity when considering when to place the trade
Be anonymous
You can enter the market anonymously, and slice large orders into tranches ('iceberg orders') to hide your full size. Meanwhile you can look out for this type of automated trading among other participants.
Enter auctions
As a DMA participant you can enter stock auctions, where the best prices often become available