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I'm looking to get some information on reading L2's and their significance in determining price trends for stocks. I've noticed a couple positions I'm in now that there is a significant gap between the bid and the ask...is this a particularily good thing?
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quote:Originally posted by knord: I'm looking to get some information on reading L2's and their significance in determining price trends for stocks. I've noticed a couple positions I'm in now that there is a significant gap between the bid and the ask...is this a particularily good thing?
In short, no, it is not a good thing when there is a big gap between the bid and ask price. Usually a stock in that situation doesn't move and there is no volume because nobody wants to buy with a big gap between the two. Also, in short, Level 2 is A MUST! It enables you to see what the trend is....buying, selling. Also, lets you keep an eye on the MM's and what they're up to especially the major players....ie, NITE and HILL. Bottom line, have to have Level 2 to trade especially the OTCBB's and Pinks.
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