Level 1 market data is top-of-book information. Level 2 market data adds depth beyond the best bid and ask.
In simple terms:
- Level 1 shows the current best bid, best ask and recent trade information.
- Level 2 shows additional bid and ask prices in the order book.
The exact information depends on the exchange, broker and data feed. Some feeds cover one venue, while others combine data from several markets.
Level 1 vs. Level 2 Market Data
| Feature | Level 1 Market Data | Level 2 Market Data |
|---|---|---|
| Best bid | Yes | Yes |
| Best ask | Yes | Yes |
| Bid and ask size | Yes | Yes |
| Last traded price | Usually | Usually |
| Last trade size and time | Often | Often |
| Multiple price levels | Usually no | Yes |
| Order book depth | Limited or none | Yes |
| Market maker or venue information | Usually limited | May be included |
| Best for | General investing and basic trading | Active trading and execution analysis |
What Is Level 1 Market Data?
Level 1 market data shows the highest current bid and the lowest current ask. It may also include the latest trade, trade size, volume and daily price statistics.
A typical Level 1 quote could look like this:
- Bid: $99.98 for 500 shares
- Ask: $100.00 for 300 shares
- Last trade: $99.99
- Last trade size: 100 shares
- Daily volume: 1.2 million shares
The bid is the highest displayed price a buyer is willing to pay. The ask, also called the offer, is the lowest displayed price at which a seller is willing to sell. The difference between them is the bid-ask spread.
Depending on the provider, a Level 1 feed may also include the trade time, daily high and low prices, and other basic statistics.
What Does Level 1 Not Show?
Level 1 normally does not show the prices and quantities waiting behind the best bid and ask.
| Side | Price | Shares |
|---|---|---|
| Best ask | $100.00 | 300 |
| Best bid | $99.98 | 500 |
This quote does not show whether more sellers are waiting at $100.03 or more buyers are waiting at $99.95. That information is part of market depth.
What Is Level 2 Market Data?
Level 2 market data shows several bid and ask prices in the order book. Depending on the product, it may also show the quantity available at each price and the exchange, market maker or participant associated with a quote.
An example might look like this:
| Bid Price | Bid Size | Ask Price | Ask Size |
|---|---|---|---|
| $99.98 | 500 | $100.00 | 300 |
| $99.95 | 1,000 | $100.03 | 800 |
| $99.90 | 2,000 | $100.05 | 1,200 |
| $99.85 | 3,500 | $100.10 | 2,500 |
The number of displayed levels depends on the product. NYSE offers top-of-book and depth-of-book products, while Cboe offers products with one top-of-book level or up to 48 levels of aggregate depth.
What Is the Main Difference Between Level 1 and Level 2?
The main difference is the amount of displayed order-book information.
Level 1 shows the current best quote. Level 2 shows what is available at additional prices above and below that quote.
For example, Level 1 may show a bid of $99.98 and an ask of $100.00. Level 2 may also show buyers at $99.95 and $99.90, along with sellers at $100.03 and $100.05.
That extra information can matter when the order is large, the market is moving quickly or execution quality is a central concern.
Why Do Traders Use Level 2 Data?
Available Liquidity
Level 2 shows how many shares or contracts are displayed near the current price. A larger displayed size may allow an order to execute with less price movement, although displayed orders can be cancelled.
Potential Price Pressure
If displayed sell orders are much larger than displayed buy orders near the market, some traders treat that imbalance as a sign of possible short-term selling pressure. The reverse may suggest stronger displayed buying interest.
This is an observation about the order book, not a guaranteed price signal. Level 2 cannot show whether those orders will remain in place or whether new orders will enter the market.
Order Execution
A trader placing a large market or limit order can use market depth to estimate how far through the order book the order may need to go before it is filled.
Short-Term Trading Activity
Day traders, scalpers and execution-focused traders may use Level 2 alongside time and sales data. They can watch changes in displayed liquidity, trade flow and the spread.
Is Level 2 Market Data the Complete Order Book?
No. Level 2 is a view of displayed liquidity, and its coverage depends on the data product.
A Level 2 feed may cover:
- One exchange
- Several exchanges
- A specific market maker network
- Aggregate quantity at each price
- Individual orders
- A limited number of price levels
NYSE offers separate products for best quotes, aggregated depth and order-by-order information. Nasdaq materials also distinguish between Level 2 quotes and deeper TotalView data.
Displayed market data has several limits:
- Hidden orders are not displayed.
- Routed orders may not appear in a venue-specific book.
- Orders can be cancelled before execution.
- A feed may combine several orders at the same price.
- A broker's Level 2 subscription may not include every exchange.
Cboe's technical documentation states that its top-of-book feed does not represent hidden orders. Complete depth is provided through a separate depth-of-book feed.
Do Most Investors Need Level 2?
Most long-term investors do not need Level 2. Level 1 is usually enough to check the current price, review the spread and place an ordinary share order.
Level 2 may be useful for:
- Active day traders
- Scalpers
- Traders handling larger orders
- Traders focused on execution quality
- Futures and options traders who need order-book depth
- Traders studying short-term liquidity
The choice depends on how you trade. If you mainly need current prices and basic trade information, Level 1 is generally sufficient. If available liquidity and execution price are central to your strategy, Level 2 may provide useful context.
What Should You Check Before Paying for Level 2?
Do not assume every Level 2 subscription includes the same information. Check:
- Market coverage: Does the feed include one exchange or several venues?
- Depth: How many price levels are displayed?
- Aggregation: Are orders combined at each price or shown individually?
- Participant details: Does the feed identify market makers, or does it show only total size?
- Speed: Is the data real time or delayed?
- Asset class: Does the product cover stocks, futures, options or foreign exchange?
- Hidden liquidity: Does the feed exclude hidden, routed or non-displayed orders?
Bottom Line
Choose Level 1 if you need current quotes and basic trade information. Consider Level 2 if you study short-term liquidity, handle larger orders or care about execution beyond the best bid and ask.
Level 2 can add useful context, but it does not show every order and cannot predict market direction.