Level 1 Market Data

Level 1 Definition

Level 1 is the real-time bid/ask quotes for securities trading on the Nasdaq and Over The Counter (OTC) Bulletin Board Service.  Level 1 is broken out into 5 key components: (1) Bid Price, (2) Bid Size, (3) Ask Price, (4) Ask Size, and (5) Last Price.

Level 1 Components

Bid Price

This is the price at which a buyer is willing to execute an order.

Bid Size

The size of the pending buy order.

Ask Price

This is the price at which a seller is willing to execute an order.

Last Price

This is the most recent price at which an order was executed.

Last Size

This is the last size at which an order was executed.

Level 1 and Day Trading

Level 1 is standard with most online day trading applications for free or a small nominal fee.  This information is critical in order to be able to assess the order flow in the market.  Day traders can start out looking at Level 1, but in order to take it to the next level, Level II is required.  This is because level 2 provides more information about not only the current orders, but all of the current active buy and sell orders in the market. 

Level 1 Trading Window

Below is an example of a Level 1 trading window.  Notice how the buy and sell orders are displayed for the stock Vodafone.