Penny Stock Level 2 Quotes

How Do I Read Penny Stock Level 2 Quotes?

Penny Stock Level 2 Quotes

Click the image to enlarge the Penny Stock Level 2 Quotes above. In the example above, the level 2 window is divided into three columns. The first column describes the bid. The bid is where you would traditionally sell to close a trade. As you can see there are 11 market makers willing to buy Citigroup at $4.44.

The second column describes the ask. The ask is where you would traditionally buy to open a trade. As you can see there are 12 market makers willing to sell Citigroup at $4.45.

We would call this situation: C – Bid $4.44 x Ask $4.45, 11 x 12.

The current spread is the different between the highest bid and the lowest ask. In this situation the spread is $.01.

From this screen we can also tell that 11 market makers are willing to buy 3,478,546 shares while 12 market makers are willing to sell 4,363,320 shares total. In this situation, you might think there are more sellers than buyers, but this can change in a second.

The last trade was at 15:52:18 for 100 shares at $4.445 per share.

NYSE/NASDAQ Level 2 vs. Penny Stock Level 2 Quotes

The major differences are that there are more market makers on the big board stocks that then penny stocks. Typically the spreads are much smaller because there is more activity. Market makers on penny stocks will typically show a size of 5,000. Unlike the big boards, size means nothing for penny stocks. That market maker may be willing to buy 200 shares or 10,000,000 shares.

Penny Stock Level 2 Quotes Tips

Traditionally you buy on the ask and sell on the bid. This is not a rule. You are also able to sell on the ask and buy on the bid. This just requires that another person is willing to buy your shares at the ask price or another person is willing to sell to you at the bid price. If there are many sellers on the ask you may decide to quickly sell on the bid, but if there are few sellers you may choose to be patient and sell on the ask. By selling on the ask you make more money and are less likely to halt a running stock.

Level 2 is available from many different penny stock brokers and can also be integrated into the EquityFeed Microcap Equities Package. I use EquityFeed’s Penny Stock Level 2 Quotes as I’ve found other sources like AlphaTrade and brokers tend to lag anywhere from one second to five seconds during simultaneous testing.