Live Prices And Level 2

Wednesday, Jan 04 2017 by
6

Just wanted to ask what people find best for Live Prices and Level 2?

Stockopedia - Any plans for either?

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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12 Posts on this Thread show/hide all

tomg23 29th Dec '17 1 of 12

Hi Matylda

Just picking up on this old thread and wondered if you ended up finding a level 2 provider. Do you currently use level 2? Can you recommend any providers? Thinking adding it to my stock picking weaponry next year

Thanks
Tom

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matylda 30th Dec '17 2 of 12
9

Hi,

I use lse.co.uk at the moment - It's about £220 I think, paid annually. When it's up (end Feb I think) I am considering moving to moneyam as they include the SETS/SETSMMlimit order books, lse.co.uk does not. You also get an online sub to shares magazine thrown in, not that it's much use but it's a half hour weekend read at the least. It's about £220 + VAT for a year all in or £110 + VAT just for live prices and the Shares online. To be honest the amount of time I use level 2, the latter is probably the sensible bet. You read about these people that use level 2 to buy at the sell price but for the times I have benefited from this, I have missed opportunities I regret. Now 99% of the time I just buy at the market price.

My view on Level 2 is this...

1 - I hardly ever use it
2 - When I do I sometimes benefit from a good entry
3 - When I do I sometimes miss a great stock

I am probably not going to bother with it any more. For example, on my Wishlist I can often watch and wait for weeks to get in, even when price is around the level I am interested in. I don't feel the need for such fine detail and precision on the actual entry any more.

I do intend to knock up a post of what I spend my money on, investing wise, I reckon it's about £1,000 a year. Hopefully will get round to it soon.

Blog: Briefed Up
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peterg 30th Dec '17 3 of 12
3

A similar experience here. I had L2 for a while, I forget who it was with, but I gave it up in the end. I decided it had pretty much no impact on the price I traded for. If you are a frequent or day trader then the cumulative small benefits may well pay off, but for my longer term style, even trading significant chunks at times, I ended up unconvinced it was worth the expense or the time spent screen watching to make any real use of it.

Peter

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clarea 30th Dec '17 4 of 12

Hi Ed

Second Matylda any thoughts on offering a level 2 service on Stocko ?

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HumourMe 30th Dec '17 5 of 12

The ideas need tidying up and consolidating but it does seem to be planned http://ideas.stockopedia.com/forums/18977-stockopedia-suggestions/suggestions/3649276-real-time-streaming-prices-and-level-ii-access

Not for me personally I think.

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tomg23 30th Dec '17 6 of 12

In reply to post #290883

Thanks for the info Matylda. I thought DMA was used for finding a good entry? I was hoping level 2 would be useful to show me the depth of the market. For example looking to see if there were any big sellers in the market looking to offload large positions and therefore depressing the share price. If this was the case I would hold out from buying. Does L2 help in those instances?

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matylda 31st Dec '17 7 of 12
3

You're welcome and thanks for the comment from others here.

Having given it a little more thought I have decided for reasons previously mentioned and those echoed by others above, not to bother with it from now on.

Sure, it lets you see the depth of the market but as a long term investor I really just don't need it.

To validate this somewhat too - Anyone with a large order (on the bid or ask) can remove it any time they want. For that reason alone it requires caution as removal of just one large order can completely change the view offered by Level 2.

My view on DMA is that we all have it - I can place a limit order via my broker - For me that's direct market access.

My summary I suppose is, as a long term investor, L2 just doesn't add any value or edge to my strategy, analysis or long term returns.

Blog: Briefed Up
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gus 1065 31st Dec '17 8 of 12
3

In reply to post #291048

Morning Matylda.

In the interests of offering a counter opinion, I think Level 2/DMA is worth consideration, especially for an active investor in generally illiquid stocks provided it gives “better execution” on trades sufficient to justify the extra cost (emphasis on the “provided”).

For example, a quick screen of AIM shows at least (probably a lot more than) 200 stocks have bid/ask Spreads of 500bps (5%) or more. While a lot of these might be micro cap dogs, 192 are in the top 5 Style ranks (Style Neutral or better). For the UK market as a whole (AIM, LSE etc.), 84 stocks are in the top 4 Style buckets (Super, High Flyer, Contrarian and Contrarian). If we take as working assumptions that L2/DMA allows a hypothetical investor wishing to trade these wide spread stocks to time/place trades to capture say 1/2 of this 5% spread, this would add a 2.5% kicker average entry/exit price. If the same investor on average churns the portfolio with an average investment period of say 4 months (3x per annum) the running benefit would be 7.5% per annum. On a portfolio capital of say £100,000 invested in these kind of stocks, that would be an annual gain of say £7,500 per annum, roughly 10x the typical cost of Level 2.

Like any tool, if L2 stays in the box unused it will add little value. Likewise, I agree it is possible to replicate DMA by posting limit orders with brokers but I lack the patience to do this as a fishing exercise to detect market depth and liquidity (not least I’m not sure it’s in the brokers’ interests to work small orders on the other side of the market for a £10 commission and give up the fat bid/offer spreads) when L2 gives timely, albeit not always complete, information. I accept the above example is quite extreme (clearly not applicable to a buy and hold investor in liquid FTSE 100’s) but for investors with particular needs I think it can add value. FWIW, I believe Robbie Burns/the Naked Trader is an advocate.

Best,

Gus.

p.s. thanks for initiating the daily morning discussion thread. Very useful complement to the SCVR reports.

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peterg 31st Dec '17 9 of 12
2

For example, a quick screen of AIM shows at least (probably a lot more than) 200 stocks have bid/ask Spreads of 500bps (5%) or more.

That is certainly true, but it's also true that many (most?) decent execution only brokers will trade well inside the quoted spread in those cases where it is ridiculously large. In general with the brokers I use, all execution only,  I  find that the smaller, less liquid stocks it''s rare to end up not trading well within the quote.

I'll accept that use of L2 and DMA may allow you to improve a bit further on that, and that those who are frequent traders the potential gains may be worth the cost in cash and time. However, for myself, making perhaps 40 trades a year mostly small to mid cap in size, I've come to the conclusion the benefits don't justify the gains for me.

Peter

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matylda 31st Dec '17 10 of 12
1

Gus,

Fair comment - I remain in the camp that as a long term investor (and not a trader) and having experience of Level 2 over many years, it does little to help any aspect of my investing. Glad the report is useful.

Traders - Not being one, I suspect there are benefits.

Peter,

For the benefit of others considering L2, I probably make a similar number of trades and agree.

Note - I also found the initial experience mesmerising, so if you do get Level 2 expect loads of initial screen time pretending you can read it and predict price, think you will become a master of reading the tape - If you're like me, you'll just waste hours and hours of your life to find out, you can't. Get used to watching price move slowly away from YOUR order as you move it up again and again. I jest here a little of course but it can actually be distracting, time consuming and addictive. I prefer just to get in and get it done with a 20 - 25% Stop and take a long term view.

I guess the above is a little similar to constantly monitoring your portfolio when you start out (watching it inch up and down minute by minute) but after a while you end up content with a quick glance half a dozen times a day.

All in all, a useful discussion here and hopefully will save some people money and time and allow others to perhaps consider the plunge into Level 2.

Blog: Briefed Up
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nickwild 31st Dec '17 11 of 12
1

I use LSE for live prices as they seem to be the cheapest at £11.99. Prices occasionally go bonkers during day making me think I can retire/have gone bankrupt and they are usually unreliable at close of play for 15 mins or so.

Live prices on Stocko would be great.

Nick

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smatthews1 1st Jan '18 12 of 12

In reply to post #291088

Thanks for sharing this, its an interesting subject which I have pondered about for a while. My initial thoughts about deciding whether this is useful or not, are backed up by your comments. As I see my self as a medium to long term investor, there is little chance I could really get the benefit out of it.

Providing I don't need a quick entry or exit, then I also use limit orders on most trades,

However if there is any reading material out there you could recommend on the subject, that would be much appreciated.

Thanks
Sean

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