Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Live4TheRisk

Level II Questions

Recommended Posts

Something that's been bothering me for a while when looking at Level II quotes. I'm still a beginner at this so please forgive me. To be competitive the bidders (BID) want to pay the highest price that will allow them to get filled and the sellers (ASK) want to sell at the cheapest price to get filled. How come AAPL has a market maker called EDGA that doesn't get filled. They are asking 597.98, why wouldn't anyone pick that up. What am I missing here??? On the flip side they are looking to buy at 560.00 so i understand why no one wants to sell them at that price since the market price is ~650 as of today.

 

What gives here?

Level2.jpg.8ced04858c3a5964503d3d72efce0323.jpg

Share this post


Link to post
Share on other sites
Something that's been bothering me for a while when looking at Level II quotes. I'm still a beginner at this so please forgive me. To be competitive the bidders (BID) want to pay the highest price that will allow them to get filled and the sellers (ASK) want to sell at the cheapest price to get filled. How come AAPL has a market maker called EDGA that doesn't get filled. They are asking 597.98, why wouldn't anyone pick that up. What am I missing here??? On the flip side they are looking to buy at 560.00 so i understand why no one wants to sell them at that price since the market price is ~650 as of today.

 

What gives here?

 

I think you have this the wrong way around. Buyers want to bid the lowest price they can to get filled and sellers want to offer the highest price they can to get filled.

 

I don't know about the market maker. But don't they have certain quote obligations rather than specific trade obligations?

Share this post


Link to post
Share on other sites
I think you have this the wrong way around. Buyers want to bid the lowest price they can to get filled and sellers want to offer the highest price they can to get filled.

 

I don't know about the market maker. But don't they have certain quote obligations rather than specific trade obligations?

 

Well Level II is just a big auction between market makers. They all will put in a bid and an offer and then they wait until someone acts on that price. Its confusing because as traders we look to buy on the ask and sell on the bid price. But when you look at through the market makers eyes its the total opposite, they are buying on the bid and selling at the offer. Isn't this just so confusing :).

 

So if the market maker puts in a bid they might decide they want to buy at a certain price but are not getting filled, they might up their bid and get filled quicker. This is what i meant in my Original Post. Its called the inside bid (highest price for bidders), the inside ask (lowest price for sellers).

 

This is why I am confused when I look at the inside ask of AAPL. Not sure what you mean by quote obligations or trade obligations, can you explain?

Share this post


Link to post
Share on other sites
With the large amount of HFT in the market today, level 2 is not of much use compared to 15/20 years ago. Too many fake quotes.

 

Exactly, i asked my friend that used to be a trader and he explained to me that its a fake/stuck quote so its ok to ignore it.

 

How does HFT trading create these fake quotes?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ADMA Adma Biologics stock, watch for a range breakout, target 26 area at https://stockconsultant.com/?ADMA
    • URI United Rentals stock, nice rally off 829 support area, watch for top of range breakout at https://stockconsultant.com/?URI
    • Date: 27th November 2024. S&P500 at its 52nd new peak for 2024; USD Firmer, Kiwi & Yen Up. Asia & European Sessions: Wall Street rallied into the close with the S&P500 and Dow registering more record highs with the S&P500 climbing 0.57% to 6045, its 52nd new peak for 2024. The Dow rose 0.28% to 44,860.3 for its 46th record of the year. The NASDAQ advanced 0.63%. Trump named Jamieson Greer as the US Trade Representative and Kevin Hassett to direct the National Economic Council. Greer was intimately involved in Trump’s first-term trade policy decisions. President Biden announced Israel and Hezbollah have reached a cease fire. Over the next 60 days the Lebanese army and state security will take control of their own territory and Israel will gradually withdraw its forces. FOMC minutes: Minutes from the Fed’s latest policy meeting revealed officials leaning toward a cautious approach to future rate cuts. All agreed to cut the rate by -25 bps and nearly all thought risks between achieving employment and inflation goals were “roughly in balance.” Upside risks to the inflation outlook were little changed, and while inflation had eased, it remained elevated. The implied December rate continues to hover around a 50-50 bet as we await the PCE price data Wednesday and the crucial jobs report on December 6. The January 2025 rate is priced for a total of 20 bps in cuts, with -75 bps by January 2026. RBNZ cut its cash rate by 50 bps, yet the Kiwi gained as traders analyzed the central bank’s rate outlook and the governor’s remarks. Chinese government approved a 500 billion yuan ($69 billion) bond quota, enabling two state-owned asset managers to issue bonds for funding projects aimed at spurring economic growth. Today: US inflation and economic growth may provide clues to the Federal Reserve’s next policy move. Financial Markets Performance: The USDIndex has dropped to currently 106.459. The Yen climbed with USDJPY pulling back to 151.82, while NZDUSD jumped to 0.5900 despite the RBNZ’s 50 bps rate cut. Oil prices stabilized at $68.84, with optimism over delayed OPEC+ output increases balancing the reduced geopolitical risk stemming from the ceasefire. Gold rebounds to 2653.54, with next Resistance at 2660-2664. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • RBLX Roblox stock, pull back to 49.2 gap support area at https://stockconsultant.com/?RBLX
    • UHS Universal Health Services stock, nice rally off the 197 support area, from Stocks to Watch at https://stockconsultant.com/?UHS
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.