ag,
what is the difference between level two and three.
I've never seen a levelIII up close, so I can only give you a general answer. Since you say you have level II, you know about the display of quotes. LevelIII is what the MMs use to post those quotes and manage their pool of stock and their activity. If you really want to know about this stuff, you might want to visit
nasdaqtrader.com
You should be able to find the MM Manual that talks about what they can and cannot do. A levelIII workstation is the thing they use to do it.
For example, if the MM really is on a buying frenzy he can set up his workstation to buy some large amount of stock at a price he bids by having it automatically update the bid every time he gets executed for the size he is showing. Also, if he showing 1000 shares lets say, and he gets hit for 200, he can have it automatically decrement to 800, etc, until the 1000 is gone, and then refresh his bid automatically. It's all that sort of functionality you have with level III, and as far as I know it has nothing you need as a retail trader. If you have some sort of status with NASD that allows you to post your quotes on level II under your own identity (there are things other than full blown MMs that can do this) then you might want one.
have you ever watched or seen level 2 on options.
I often watch all four exchanges (AMEX, CBOE, PCST, PHIL) for quotes on options. This is similar to watching a NYSE listed stock on "levelII" where you see quotes from the NYSE itself, and from the secondary exchanges (NASD, MIDW, PCST, PHIL, BOST, CINC, maybe others?). It's not really levelII, which is a NASDAQ thing, but theRealTickIII brokers use the levelII window to display quotes from the individual exchanges.
Hope this helps some.
Dan |
