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Introduction to theLEVEL 2 screen Level 2 is a quote screen that displays all the competing bids and offers. These bids and offers come from big institutions and banks as well as individual traders displaying their orders thru ECN’s. There are over 400 registered market participants who are able to place bids and offers in every single stock listed on the NASDAQ. Level 2 trading literally revolutionized the markets. The NASDAQ stock exchange was the first to introduce level 2. Meanwhile there are a few international exchanges following. Here is a look at a level 2 window that also has order entry implemented: 
The left column displays all the buy orders: The higher the price that people are willing to pay for the stock, the higher the entry in the left column. The price on top is called the “best bid”. Each different color displays another price level. There is no other meaning to these colors. The right column displays all of the sell orders: The lower the price that people are willing to sell their stocks for, the higher the entry in the right column. The price on top is called the “best ask.” The prices on top of the two columns are the best prices available at the moment. They are referred to as the “inside market.” These prices will be the ones you can find in regular level I quotations. Let’s take a little closer look at the ask side of our level 2 window: The first column gives you information about the market participant. The second column (ask) tells you what price the participant is willing to sell the stock for. The third column displays the size at which he or she is willing to sell. You have to multiply the number by 100, so 10 would mean that there are 1000 shares for sale. ( with penny stocks you multiply by 1000) In the screen above, EDGA for example, is trying to sell 500 shares at a price of $27.69. We will leave it at that for now and come back to it while looking at the next chapter entitled the US stock markets 
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