I have read a bit about Level 2 and the benefits of seeing the market depth to help you gauge the market. I often indulge in L2 watching, waiting for the "perfect" moment to either get in or out of a stock. I also hope that this is a good time to start this since I will be sitting on the little cash I managed to pull out for a while till the turbulance calms a bit; additionally, hope to get some info from other PIs on how to get the best out of L2.
I have noticed quite a few things (minor they may be but thought I'd air them).
1. When a private investor (O trade) makes a transaction, this is not always reflected as the latest price for some stocks. Only AT trades are, why is this the case?
2. The O trades never alter the order-book; I know in my case it may be because my brokers are MMs, and therefore may be buying from them, but should these shares / securities not be up on the order-book too?
3. Not all trades executed (buys or sells) are streamed in the trades window, is this because the service is not DMA?
4.

thanks Ian - I am not sure whether any of my querries above also apply to your service, but could you please throw some light?

sned,

I am not an expert on Level 2 I am afriad, but I am sure on this thread and the thread pointed out to you above (by skinny), your fellow posters will be able to help you out.

Our help pages should give you a good starting place : http://www.moneyam.com/help/?page=level2

Ian

Sned: I'll try and help.

When a private investor (O trade) makes a transaction, this is not always reflected as the latest price for some stocks. Only AT trades are, why is this the case?

In simple terms an O trade is one that executed through a market maker and therefore never hits the electronic order book, it does not directly influence the level 2 screen you see. As a quick example say you were a buyer of 125 share CSR you would be quoted 618.50 by the market and if using a normal broker/market maker transaction, in your case Barclays from the screenshot, this would be effected away from the Level 2 screen you see and not make a direct influenec on the pricing. However if you had DMA access you would effect an on book order (an AT trade) and you would take the 125 shares appearing at the top of the right hand clomn. If the quantity you wanted to buy was 325 at 618.50 shares you would remove all the top order quotes on the right hand column and the price for CSR would move to 617 -619

2. The O trades never alter the order-book; I know in my case it may be because my brokers are MMs, and therefore may be buying from them, but should these shares / securities not be up on the order-book too?

No the order book is only for those shares entered to buy and sell via the DMA system, O trades never directly influence the order book, of course indircetly they might as MMs use the order book to balance their books.

3. Not all trades executed (buys or sells) are streamed in the trades window, is this because the service is not DMA?

Most buys/sales are streamed however the trades might have been executed via the Plus Markets trading sytem or might be of a size where the trade declaration is delayed.


Mike

thanks Mike, much appreciated. I have been toying with the idea of opening up an an account with DMA, however still looking to find advantages of holding one.

Sned,

If you are Level 2 with MoneyAm, then go to the Traders Room and look at the L2 thread. Although I have posted my bit on there, there are several posters with far more knowledge than I who have posted. Well worth a read.

Regards Greek.

un-fortunately not L2 with moneyAM - thx for your input though

actually no. 3 is the most puzzling because i used to have an account with Barclays and in about 1 trade in 25 my 'o' trade simply did not appear. This was before plus.

It seemed to be stock specific. drx for example never appeared. I assume the trade must have been going through another exchange but it seemed a bid dodgy to me

i actually thought the same (as in a bit dodgy). usually happens when you are "day" trading a stock, seems these guys monitor traders! e.g the buys don't register but the sells do register.

Sned, the idea of buys and sells is also a little misleading. Each buy is matched with a corresponding sell - you buy, MM sells.

If an institution wants to offload a lot of stock, there could be masses of buys by private individuals but the price stays the same - because the broker is feeding new stock in at the same price until they've got the lot away. Same applies in reverse for "sells".

that puts a new angle on things, which I thought I had sussed out e.g CSR 617.0 - 618.5 (above).

1. If I place a BUY limit order of 618.0 that gets executed relatively straight away then this will register as a sell. (the scenario you describe above)

2. If I place a BUY quote and deal order, I will be quoted e.g 618.36 (with price improver) and when executed will register as a buy.

My point here is both these trades are below the published price but register differently, and this is because of price ranking which I understand; however, the querry I was making is when either trade is executed and it does not register at all on the streaming trades window, it does smack of dodginess.

Sned,

Whenever I trade I always look to the streaming trades for confirmation (as well as the acceptance record on my brokers site) and usually the trade is recorded almost instantly. BUT sometimes if a trade is carried out via the phone, through a broker, the trade (especially if small) is sometimes lumped in with another, especially if it is a limit order no matter how placed as there will be many similar limit orders, again especially in a very liquid share. These are the trades that sometimes appear as L trades.
If you have ever attempted to read and understand the rules of the LSE you probably found them as I did. As clear as (thick) mud.
A bit like the Inland Revenue Tax Rules, which those who work there have admitted they don't fully understand.
But dodginess in the markets. How dare you. You will be saying there are dodgy Lawyers and Politicians next.
Apologize if you were already aware of this.
Greek.

sned - interested in your comment "these guys monitor traders" (post12). Is it true that MMs monitor individual traders?? Anyone else any comments ???

Further querries

I am afraid - are Limit orders ranked by price and time on the MMs and market orderbook simultaneously?

e.g If I placed a Limit buy (above image) for 617.00 @ 12:43, will this get executed before the trades placed at 12:44, and if not why?

Sned; Price and time priority. So if you placed an order at 617p at 12.43 you would sit at the top of the buy column so would get filled first, however if you entered a buy order now (3.10pm) at 617 you would sit third in the list

thx Bullshare - and that applies to LIMIT orders too ..?

I think the difference between DMA and using a broker is confusing you Sned. Are you using direct access or buying through barclays stockbrokers?

With Direct access to the order book you place an order and wait to be filled on the buy side @ 617p.

If you're buying through a broker then you will get filled instantly on the sell side if you place an order at 618.5, and will probably get filled just under the price, maybe at 618.3.

If, using your broker, you place a limit order at 617p then you have to wait until the sell side comes down to 617p.

Does this help?

Absolutely. I was confused on that bit. I gave up on limit orders because they rarely got executed; the reason being what you just explained above. thx a lot for your input.

I deal through a broker but am interested in dealing DMA - how can I do this???
Thanks.
JJ.

Interesting article here