Level 2 quotes

Level 2 quotes show multiple layers of bid and ask prices for a stock, not just the single best bid and best offer that a standard quote displays. A basic quote, sometimes called level 1, shows only the highest current bid and the lowest current ask along with their sizes. Level 2 quotes go further, listing a range of prices above and below that top level, along with how many shares are available at each one, often broken down by which market maker or venue posted them.

This deeper view is often described as showing the order book, or the market's depth, because it reveals how much buying and selling interest is actually stacked up behind the current best price. A stock might show a tight bid-ask spread at the top level but very thin size just behind it, meaning a moderately large order could quickly move through several price levels and get filled at progressively worse prices. Level 2 quotes make that kind of thin depth visible before it happens, rather than only after the fact.

Active and short-term traders rely on level 2 quotes to judge how a large order is likely to affect the price and to spot patterns in how orders are being added or pulled from the book. Long-term investors generally do not need this level of detail, since a small order in a liquid large-cap stock will fill near the top of the book regardless, but it becomes more relevant when trading larger size or less liquid securities where the depth behind the best quote matters.