 Recognizing the advantages of trading with NASDAQ TotalView data, eSignal has made arrangements to automatically give all qualified Level II subscribers access to TotalView, starting with the May service month. A few users may need to call to activate their subscription.
By making TotalView automatically available to qualified users, eSignal is supporting the trading activity of its subscribers and their success by granting access to the best NASDAQ information available, which allows you to trade smarter, faster, and more successfully.
Maybe you remember back in the 1990s when Level II was all the rage, or maybe you remember only back as far as when TotalView was rolled out a couple years ago. Perhaps, you are new to trading and are trying to understand what information you need to trade effectively. In any case, recent changes are helping TotalView fulfill its promise to be the premium data product that serious traders need.
As a result of native growth in NASDAQ Market Center Trading, the integration of full Brut liquidity, as well as speed enhancements introduced this past February, TotalView now adds even more value to those using it in their trading activity.
For those of you who missed our webinar describing the advantages of trading with TotalView, here are the main differences between the legacy Level II service and TotalView:
- TotalView shows all of NASDAQ’s and all of Brut’s quotes and orders (market depth) rather than the small subset that Level II shows. TotalView advantage over Level II has continued to skyrocket for a variety of reasons and now shows upwards of 10 times more depth and transparency than Level II shows
- TotalView is the fastest source of NASDAQ order book data available.
- Coming soon to eSignal’s TotalView: New data called the Net Order Imbalance Information to help subscribers trade much more successfully at the opening and closing of each trading day. (Look for my next article in the Exchange -- once the data is available on eSignal -- explaining the Net Order Imbalance data and how it can be used to improve your trading performance.)
TotalView is NASDAQ’s new flagship for quality market data and is the standard used by professional and institutional traders. TotalView is THE market data product for serious traders. An archived copy of the most recent webinar presentation is here.
In addition to the pure speed advantage, TotalView’s core advantage is that it reveals multiple quotes for each market participant. In the real world, this means that, while you used to have no way to see a market maker’s second or third order, you’re now able to. TotalView exposes the breadth of customer limit orders, shows positions from a second branch of a market maker and gives a hint as to how market makers are strategically working big institutional orders.
Level II is not able to show these quotes because it only supports one quote from each firm. By providing multiple quotes from each firm, TotalView lets you see “the rest of” the market depth veiled from Level II.
Let's look at two examples -- using real TotalView data -- showing how TotalView data can be used to execute trading strategies more effectively.
1. Imagine that day trader Dave, having entered a trade previously that day, had ridden the stock up for a while and was considering exiting his position. His average purchase price on his 1,000 shares was $42.77. His interest in exiting the stock was principally that he wanted to escape with zero loss or better. He is firm in his conviction not to carry positions overnight unless absolutely necessary. As a TotalView trader, he sees the following data:
Note the shares he would not see using Level II alone. With just Level II, he would see no buyers at either $42.77 or $42.76 and would also miss 8,400 shares at $42.75. Given the TotalView data, he sees that he can get out of the position profitably. If he were looking at Level II alone, it would appear as if he’d need to take a loss in order to exit.
Had he not seen TotalView, he would hold the position until the end of the day, never see another profitable exit point and be forced to carry the position overnight. By virtue of having TotalView, he is able to lock in profits.
2. Imagine that swing trader Sam is looking to get out of the position immediately; there is a rumor that news is about to break. Sam has held the position over several weeks and has experienced modest gains. However, spooked by the potential for bad news, Sam wants out now. Again, by using TotalView, Sam is able to know where the true market is before a Level II trader does.
For example, note the quotes from 42.79 to 42.76 on the bid side. Imagine that these quotes fanned out from 42.75 the instant just prior to Sam pulling them up. These quotes actually appeared more quickly on Sam’s eSignal display than they did on his buddy’s Level II display.
Sam is able to take action based on seeing this data prior to his friend's seeing it. His friend, not aware of some quotes in the montage, and seeing other quotes only after they appeared in TotalView, is unable to take action because he can’t determine total liquidity as quickly.
In general, by seeing all the market depth from the NASDAQ Market Center, TotalView traders can take advantage of many trading opportunities that are not equally available to those individuals still using the legacy Level II. For example, TotalView users employ enhanced trading strategies, such as pegging to the multi-quoting Axe.
Use of these strategies, and others, has made TotalView the new standard in the professional community. Now, you too can trade with the same tools that the professional, institutional community uses. I hope you enjoy using these state-of-the-art tools from NASDAQ via eSignal.
In addition to checking out the webinar, please join me on June 16, 2005 for an eSignal Chat Session on NASDAQ TotalView data. I hope you will enjoy this live chat event, where I will continue describing the features of the NASDAQ TotalView data and how it can be used by professionals and nonprofessionals alike to better understand the “true depth” of the NASDAQ market and make smarter, more profitable trades.
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