What Is Happening Behind the Scenes

This is the fifth in my series to help investors navigate and leverage the power of the Fidelity Trader+ application. Do you ever wonder how much demand there is for any given investment at any point during the day? Trader+ now has incorporated something that I frequently used in Active Trader Pro. Before you watch the video, I recommend that you read this post. However, if you want to jump right in, here is a link to my video: Wayne YouTube Level 2 Time and Sales

LEVEL 2 Trading Information

Do you ever wonder “is there a lot of interest in this investment?” “What are investment buyers currently offering as “BID” prices to buy an investment? What are the sellers asking – what is their ASK price and how many shares do they want to sell? LEVEL 2 gives you a more detailed look at what is happening for any stock or ETF that is trading actively.

Fidelity Trader+ LEVEL 2 Functionality

In Fidelity Trader+ (Trader+ Desktop), Level 2 is the order-book view that shows the streaming bid and ask quotes grouped by price levels (not just the best bid/ask). It displays bid depth on the left and ask depth on the right, with higher bids and lower asks at the top of their respective columns.

It also uses color-coding by “level” to make depth easier to see: the 1st level is green, 2nd level is dark blue, and 3rd level is light blue.

Practical investor use:

See how much liquidity sits at each price (how “thick” the book is around current prices).

Judge near-term buy/sell pressure (where orders concentrate can affect short-term price movement and fills).

Time executions more precisely when combined with tools like Time & Sales (often used for trade-by-trade tape confirmation).

Access to directed trading and Level 2 data is in Fidelity Trader+. Enable directed trading in settings to route your order to specific exchanges right from your trade ticket.

Why “Level 2 data” is Important to Investors

  1. Level 2 information reveals supply and demand beyond the best price. Instead of only seeing the current best bid/ask (Level 1), Level 2 shows how much buying and selling interest sits at many prices, which helps explain why a stock moves (or stalls).
  2. This information helps a buyer or seller assess liquidity and execution quality. Large amounts of orders near the market can indicate deeper liquidity and potentially tighter spreads; thin depth can mean higher volatility and more slippage when you trade.
  3. Level 2 signals short-term pressure and possible price moves. Clusters of bids or asks (especially near the current price) can indicate where the market is most “stuck” or where a move may accelerate if those orders get consumed.
  4. This information improves trade timing for active strategies. Day traders and other short-term investors use order-book dynamics to decide when to enter/exit or to set expectations about how quickly prices might change. I don’t recommend day-trading, but you can see why a day trader would want to know what others are doing.

A key caveat: Level 2 can include deceptive behavior (e.g., orders that appear but are canceled), and some large trading interest can be hidden or partially shown—so it’s best used alongside other signals rather than as the sole basis for decisions.

The Announcement

Here is the announcement that caught my attention. I will talk about other new features in a future video.

How To Access LEVEL 2

Here is an image from Fidelity describing the location of the new feature.

Images from my Trader+

Finally, here are some still images of the things I talk about in the video.

Trader+ Value Proposition

While most of my readers may not care about Level 2 and Time & Sales, if you get serious about your investing journey, it pays to know that the tool Fidelity provides (for free) is a powerful way to observe the market and the trading activity for any stock or ETF you might consider buying or selling.

Seeking Alpha, however, is a tool I think every investor should at least consider using before they buy any investment.

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