Level II Quotes are a Necessity

September 5, 2007 | Posted by Jorge

If you have access to Level II quotes, use them and use them well. If you do not have access to Level II quotes, find a way to get them. It’s worth the money.

Level II quotes give you a real time look at the market, a heartbeat if you will. You can see the buyers placing pressure on the sellers and vice versa. Not only does this work with stocks, but with options and futures in addition to other investment types. Case in point. A week or so ago I placed a “sucker” bet on XTO 60 Sept contracts from $15-$25. This morning I noticed XTO’s price spiking with the Level II quotes I use from OptionsXpress. The options price spiked for about 5 minutes. In those 5 minutes I went ahead and sold my sucker bet. The result? A quick $70 gain. Granted, that’s not a large sum of money, but when you only have $1500 to invest, that’s a nice 5% gain. It also helps to bring my portfolio back to break even.

Moral of the story: Use Level II quotes in addition with your research. Your portfolio will thank you for it.

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