Key Takeaways
- Shows top bid, ask, and last trade prices.
- Displays real-time best national bid and offer.
- Free, basic market snapshot for casual traders.
- Lacks full order book depth and exchange details.
What is Level 1?
Level 1 refers to a trading screen that displays real-time quotes showing the national best bid and offer (NBBO) for a security. It includes the highest bid price buyers will pay, the lowest ask price sellers will accept, and often the last trade price and volume, providing a concise snapshot of market activity.
This data is ideal for investors tracking price movements and market sentiment without viewing the full order book depth, making it accessible to most retail traders and available on many platforms like those reviewed in our best online brokers guide.
Key Characteristics
Level 1 data provides essential market information in a simple, real-time format:
- Bid Price and Size: The highest price and number of shares buyers are willing to purchase.
- Ask Price and Size: The lowest price and quantity sellers are willing to accept.
- Last Price and Volume: The price and number of shares from the most recent trade.
- National Best Bid and Offer (NBBO): Reflects the best prices available across exchanges, ensuring you see the most competitive quotes.
- Accessibility: Often free and included on platforms for stocks like Apple, enabling quick decision-making for investors.
How It Works
Level 1 quotes aggregate the best bid and ask prices from all market exchanges, updating continuously to reflect current market conditions. This snapshot allows you to quickly gauge the supply and demand at the top level without the complexity of full order book details.
Because Level 1 does not show deeper market depth or order layers like an iceberg order, it suits investors focused on price trends and liquidity rather than detailed order flow analysis. Many investors use Level 1 data alongside tools like time and sales to assess trade direction and momentum.
Examples and Use Cases
Level 1 data is widely used across various markets and securities for real-time monitoring and decision-making:
- Blue-chip stocks: Traders can track bid/ask spreads and last trade prices on companies such as Apple, helping identify periods of high liquidity or volatility.
- Market sentiment: Rising bid sizes combined with shrinking ask sizes may indicate a potential rally or bullish sentiment in a stock.
- Basic order tracking: Retail traders often rely on Level 1 data to monitor price movement and avoid pitfalls like trading in illiquid securities, where spreads and sizes can be misleading.
Important Considerations
While Level 1 data offers valuable insight, it lacks detailed market depth, omitting the full order book and exchange-specific bids and asks. This can limit your ability to detect hidden liquidity or large orders placed via dark pools.
For active traders requiring deeper transparency, advanced data like Level 2 or Level 3 may be necessary. However, for most investors, Level 1 provides sufficient information to track price action and make informed decisions without the complexity or cost of deeper market data.
Final Words
Level 1 data offers a clear, real-time snapshot of market prices and liquidity, essential for quick decision-making. Check your trading platform’s Level 1 feed to monitor bid-ask spreads and volume before placing trades.
Frequently Asked Questions
Level 1 trading data shows real-time quotes including the highest bid price buyers will pay, the lowest ask price sellers accept, and the last trade price with volume. It provides a basic snapshot of market activity without deeper order book details.
A Level 1 screen displays the national best bid and offer (NBBO) including the bid price and size, ask price and size, and the last trade price and volume. These elements update in real-time to help track price movements and market sentiment.
Level 1 quotes are widely accessible for free through most online brokers and trading platforms like Webull and Questrade. They stream in real-time without requiring paid subscriptions, making them convenient for casual investors.
Level 1 data helps investors monitor market trends and sentiment by showing changes in bids and asks. For example, rising bid sizes may indicate bullishness, making it useful for long-term investors tracking performance or consolidation.
Level 1 data is cost-free, lightweight, and fast, making it ideal for basic monitoring, charting, and alerts. It provides insightful information on the best bid and ask prices without overwhelming detail.
Level 1 data only shows the top bid and ask prices without revealing full market depth or order book queues. This makes it less suitable for day traders or those needing detailed exchange-specific order flow information.
The bid-ask spread reflects the difference between the highest buy offer and lowest sell offer. A tight spread usually signals good liquidity, while a wide spread may warn of illiquidity and higher trading risk.
Bid size shows how many shares buyers are willing to purchase at the bid price, while ask size indicates shares sellers want to sell at the ask price. Changes in these sizes can reveal buying or selling pressure in the market.
