In this video Ross, from Warrior Trading explains Level 1 Market Data and how it relates to a stock. In the Lightspeed Trader platform, he walks through specific stocks and the plethora of data available for level 1 market data. This includes current price, best bid, last price, amount of volume today and much more!
Hey, Everyone. Ross here from Warrior Trading. So, in this video, I'm going to talk about how to understand Level I Market Data.
Alright. So, Level I Market Data tells us a few things about a stock. It tells us the current price, including the best bid, the lowest ask, the best buyer, the lowest seller, the last price, the amount of volume that's taking place today. And you will also be able to see the percentage of change that is taking place today: the high, the low, the open, the close ... the previous day's close. And you'll be able to see the order size of the current best buyer and best seller.
So, what does that all mean? Well, let's take a look at a couple of examples and I think that will answer some questions.
Alright. So, we are going to look here at Apple ($AAPL). As you can see, this top section here shows us some of our Level I Market Data, including the high of day ($145.72), the low of day ($142.08), the previous day's close ($157.92), the current day's open ($143.98), the difference from the open to the close in the number of dollars and cents per share, the last price (which is updating almost instantaneously), the amount of volume that is taking place today (this is 70 million shares) and this right here is the percentage change (down 9% today).
So, that's all Level I Market Data. Also included in Level I Market Data is this first green tier, and as you can see, these green tiers are moving around quickly. Right now, the green tier goes down to there. This is telling us the current price of the best buyer and the current price of the lowest price seller. So, remember the market is where buyers and sellers come together. The best buyer and the lowest price seller create the current market value, but between those two points there is always a spread. And the spread is as little as one penny for stocks that trade above a dollar. So, this stock here, Apple, is mostly trading with a one-penny spread: $143.30 by $143.31. But here you see Facebook ($FB) currently has a three-cent spread, a two-cent spread from $3 ... from $131.98 to $132. Down here General Motors ($GM) has a one-cent spread, Bank of America ($MER-K) has a one-cent spread. This is a more thinly traded stock. It's got a 35-cent spread. Now it's got a 34-cent spread. So, this is a pretty big spread. The difference between the best buyer and the lowest-price seller.
Now what we can also see in Level I Market Data is the number of shares available to buy or sell. So, this is currently a buyer interested in buying and you can see these numbers here. We always add two zeroes. So, if you see four, that means 400 shares. If you see 10, that means 1000 shares, alright? There's 10 ... that's about 1000 shares someone wants to buy at $143.18. And here you've got about a thousand shares total that people want to sell at $143.19. Remember that on some stocks, more than 80% of the volume is algorithmic trading, which means what you're seeing right now may not be actual traders placing sell orders and buy orders this quickly, but algorithms in big computer systems that are trading these stocks. The reason they do that is they benefit from the very small moves when they do that multiple times in a single day.
So, this is pretty much the complete summary of Level I Market Data. We've got our market data here in the top corner, and then the first row in green is your Level I Data. All the data below that would be considered Level II Market Data and I'll talk about that in a separate video.
As usual, any questions, don't hesitate to reach out.
In this video Ross, from Warrior Trading talks about the pattern day trader rule. This rule states that traders are allowed three trades in a 5-day period if your account is under $25,000 and it is a margin account.
In this video, Ross from Warrior Trading explain how to use the volume weighted average price and how it is different from a moving average. The volume weighted average price is available on intraday charts and is the average price of a stock over the course of a day.
Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.
Copyright © 2001-2021, Lightspeed, LLC. All Rights Reserved.