What is Nasdaq Level II?
Nasdaq offers several levels of quote information to its subscribers. Nasdaq Level I data provides the current best bid price and ask prices, along with the trades that occur in each stock. Nasdaq Level II expands this data to include the individual market maker information for each stock. With Nasdaq Level II, for example, you can see that the market maker, Goldman Sachs (GSCO), is quoting a bid to buy 1000 shares of DELL at 24.76 and is offering to sell 1000 shares of DELL at 26.60. Nasdaq continuously compiles the various bids and offers from all market participants to display the best bid and offer data (Nasdaq Level I data). Perhaps the best bid price (i.e. highest) for Dell Computer is currently from First Boston (FBCO) quoting a bid of 26.35, and the best offer price (i.e. lowest) is Merrill Lynch (MLCO) quoting an ask price of 26.50. In this case, the Nasdaq Level I data will show a best bid/ask quote for Dell Computer of 26.45 bid and 26.50 offered.
