What Is the Difference Between Level 1 and Level 2 Data?

Level 1 vs. Level 2 market data: what do you actually get?

Level 1 data generally provides top-of-book information, such as the best displayed bid and ask, along with trade information depending on the service.

Level 2 data provides additional depth, showing displayed orders at multiple price levels.

For an order flow trader, this distinction matters.

A trader studying executed volume and basic bid/ask activity may have different requirements from someone analyzing the DOM across multiple price levels.

However, Level 2 does not reveal every hidden order or every participant's intentions.

Before subscribing, check the provider's exact data definitions and exchange entitlements.

Paying for deeper data makes sense only if it supports your analysis or execution needs.