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Level 2 Trading

Level 2 is an in-depth format for trading shares that lets investors view extensive pricing data and market depth from a variety of exchanges. Using the Level 2 trading data traders can gauge market sentiment and liquidity to improve their trading decisions. It also allows them to place orders at any level and potentially within the spread when trading CFDs.

Most investors who receive share price data from the news media only see the so-called “Level 1” information, which consists of the latest bid and offer prices. Sometimes they are simply quoted a single “mid” price. In reality, the bid and offer are not the entire market. They are, respectively, the highest price buyers are willing to pay (bid) and the lowest price sellers are willing to receive (offer or ask).

Behind the bid and offer, however, there is a queue of other orders at different price levels. For example, different traders might input orders to buy or sell 100 units at Price A, 100 units at Price B and 100 units at Price C. These buy and sell prices and volumes are called the “order book”.

By accessing “Level 2” information through their trading platform, investors can see the entire order book and gauge the actual volume of orders waiting to be filled, as well as the spread between different price levels in the order book.

When trading high-volume shares like Lloyds or BP, most market orders from retail investors will be easily filled at Level 1. For less popular shares, however, there may be insufficient liquidity for the buy/sell order to be immediately filled at the level 1 price. Instead, the order will be partially filled at level 1 and the remainder will be filled at level 2 bid/offer price. For large enough orders of illiquid shares, sometimes even level 2 is insufficient and orders will need to be filled at prices corresponding to levels 3 and/or below.

Understanding Level 2 trading helps avoid the problem of insufficient liquidity and being filled at worse buy/sell levels that the investor originally wanted. Reading the order book can be crucial for investors who wish to trade less popular stocks amongst the Mid-Caps and the Alternative Investment Market (AIM). These shares can often offer volatility and big share price moves that are more attractive than their bigger counterparts. The trade off, however, is that entry and exit orders are harder to be filled at the “market price”.

London Stock Exchange (LSE) currently offers 2 types of electronic trading. The flagship service, SETS, provides Direct Market Access (DMA) to the central market for most liquid securities, meaning traders can buy and sell shares directly from each other. The alternative service, SETSqx, is set up to accommodate smaller, less liquid shares by using a combination of DMA and market makers, who are typically large brokerages that provide the necessary additional liquidity.

Using DMA to bypass market makers may offer tighter spreads and more accurate pricing. With Level 2, the order book is transparent to the investor and puts them in control of their trading. DMA orders are immediately executed, so there is no lag between inputting an order and getting the best price available.

Level 2 is an advanced trading mechanism to better understand the markets, get better prices when issuing buy or sell orders, as well as to manage market risks. Understanding the order book can help investors avoid the problem of “trading blind”. Level 2 gives investors full transparency and puts them on an equal footing with all other market participants in the order queue.

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
EXCELLENT

4.81 Average

156 Reviews

George

I have found Accendo staff very helpful,,and informed. I have traded with you for some years now and have no regrets. Keep up the good work!

Posted 3 years ago

Shaun D

since signing up for Accendo I have had two traders, Mark and Sam. I have found both of these to be very informative about how CFD's work and they have made it very easy for me. Since working with Sam (last four months) my trading knowledge has improved and I can make more informative decisions about which Company's to invest with. Keep up the good work Sam.

Posted 3 years ago

Anonymous

I am very happy with the service I get from Accendo Markets and in particular Amrit Panesar. He is very professional and pleasant to speak to and this counts for a lot.

Posted 3 years ago

Shreekant P

Its a good site for dealing stocks worldwide and having good staff.

Posted 3 years ago

Nick W

Krishan Appiah is one of the most dedicated / informative broker I have ever had.

Posted 3 years ago

Thomas I

Since I have been trading with Accendo Markets I have experienced much greater success than has been my experience with other trading companies mainly due to the help given by, what I consider to be my terminal with the trading floor, Mark, who has been most helpful in reminding me of the progress of my positions throughout the day and keeping me in touch with those positions so that I can more easily make successful trades when appropriate instead of missing out on opportunities through lack of attention. He draws my attention to the situations and enables me to make profitable trades. I am very happy with the situation at the moment and am enjoying the experience. Thomas Irving.

Posted 3 years ago

Kartik A

Accendo markets keep me connected with the market and its very well followed by Mr. Krishan Appiah ,which helps me to take certain decision on time.

Posted 3 years ago

Peter p

I have been trading with Accendo Markets and James Abbott my account manager for coming on 5 years now, James Abbott the senior trader of Accendo Markets provides me with up to minute information when I need it and find him very easy and professional to deal with. Whenever I need to trade or am not sure about anything James is always their to help with any queries I may have. The Accendo Platform I find very easy to use and navigate although it has been slightly changed over the years but definitely for the better. Personal when I do trade 90% of the time, I rather telephone call to place my trade dealings and if James is not there to take my call I find others at Accendo like Sam, Lee take my trades and are. All in all everyone at Accendo Markets are amazing to deal with and my relationship with Accendo is just as I like it. Peter Petrou

Posted 4 years ago

Mrs. J

"Our Trader, Aymen Azizi, has been nothing but attentive to our every need throughout our long relationship with him. No issue is too small, full explanations on all our questions."

Posted 4 years ago

Brian R

I have been with Accendo for a long time now, ten or twelve year's, probably more . As I told Sam (my trader) I thought that CFDs were better than sex . I stopped trading for a few years and only started back about a couple of months ago. But it is as if I had never been gone , so to speak. Sam has helped me every step of the way, at my age one forgets things. I have only praise for Accendo and as far as I am concerned the platform is the best . Now I am back trading at 71 years of age, I might even try sex again. Brian Robertson.

Posted 4 years ago

Jim W

I understand how to make a profit with CFDs. I am restricted by the range of companies I have knowledge of. Although, I am not sure that is a big problem. Tom Robertson is a very fine man.

Posted 4 years ago

Rebekah S

Well, I would not be trading without the help of my trader, Sam Alnakkash. He provided a really great overview of Accendo Markets, an insight into trading in general and how to get started in trading online. His advice, support and training has been fantastic all along the way, enabling me to start trading earlier than I would have done had I not had the support. He has also been very adept at understanding me as a client in order to help me achieve my trading goals. I still have a lot to learn and hope I will get there.

Posted 4 years ago

Nick z

I like the updates on shares I trade. Updates from Bloomberg and Reuters plus industry updates and breaking news. I've had Matt Grice and James Abbott and found both to be excellent. I would like to continue a personal service with James. He understands how and which stocks I trade.

Posted 4 years ago

Steve O

Excellent, knowledgable broker interaction and communication, coupled with very good research and analysis.

Posted 4 years ago

William P

Being new to direct trading I needed help and was given all the time and advice that I needed to feel fully able to make decisions on what I wanted to invest in. I asked for and got exactly the type of info I required provided by Tom Cook, who I would recommend to anyone looking for help.

Posted 4 years ago

Mr. W

I have been dealing with accendo for the past 8 years my broker Amrit I find him very helpful when he is there lol and had many offers to change but will not do it Bill Roberts

Posted 4 years ago

Zoran N

Very good all round service! Timely market information. (charts + trends coverage ) On the ball accounts managers ,quickly available and alert . Part of my success owed to my personal manager Mr Sam Springet , than you.

Posted 4 years ago

Mr Brian C

Easy to deal with.....

Posted 4 years ago

Muhammed S

Accendo markets are great for trading cfds and their research is second to none! Aymen manages my account is extremely helpful and always keeps me updated on market info. Thanks again

Posted 4 years ago

Mr Buta B

Always available, whenever I call I get straight through to someone that can and will help. The staff are very knowledgeable, helpful and easy to talk to.

Posted 4 years ago

Stephen B

Aymen Azizi keeps an eye on what is happening in the market and informs me with timely relevancy, email call, and txt.

Posted 4 years ago

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