In the midst of chaotic 2020, online brokers have been offering up their services to eager investors that are looking to participate in the high flying financial markets. These brokers offer various features. From zero commissions to stock research to trading platforms, you name it it's out there. When it comes to trading platforms, however, one broker shines among the rest in the plethora of features that it offers. Webull is that broker, and lucky for you, it recently released its level II trading screen called "TotalView." But, before we go into Webull's new installation on its trading platform, what exactly does it mean to trade on the second level?
Traders often use the second level to give them an edge on the market when making high-frequency trades. Level II lets you see all of the bids and asks for the stock that you're looking at along with the number of shares the buyers/sellers are looking to buy. Remember, every transaction in the stock market is zero-sum, meaning if I buy it, someone had to sell it to me. As a result, for every buyer, there is always a seller, and second level trading gives you the transparency of seeing those orders!
There are many reasons why trading on the second level is important. Mainly, traders use it to have a better gauge of what inflows and outflows are occurring on a certain stock in order to spot patterns and unusual activity. This process of analyzing the second level of a stock is called "reading the tape."
Highly sophisticated traders analyze buy and sell orders to understand the story of how a stock trades. The "tape" tells them who is buying, who is selling, how many shares, and at what price. For example, one strategy when "reading the tape" is to spot "whale orders." Whale orders are unusually large buy or sell offers made that should raise a red flag. For example, if there are typically buy/sell orders of 10-20 shares at $5 of a stock, and then there is a buy for 5000 shares of the stock at $5.05, this would be considered a "whale order." Now that you know more about the importance of a second-level when trading on a highly frequent basis, let's take a closer look at TotalView and some of its fantastic features.
So reading the tape on a second level is important, but what tools does Webull offer in its new platform to enhance traders' experience utilizing this feature? Let's take a look at some of TotalView's most important features now.
TotalView gives its users a comprehensive display of the bids/asks for single securities on its platform. The bid price is the highest price that you can buy a stock, and the ask is the lowest price at which you can sell a stock. Through TotalView's second level charting, you will be given the 30 best bids and asks for your stock. This means you can choose the best deals when you choose to buy or sell a stock. This tool is extremely important especially if you are looking to trade stocks with high spreads between their bid and ask price. For example, if there is a big difference between the bid and ask prices of a stock, it is very important to take the best offer. Taking the best offer means getting in at the most optimal price which enhances profits.
When analyzing the second level of a stock, many traders calculate the total amount of buy/sell orders to gain insight into the market's sentiment for it. If a stock is having more buy than sell orders, it is a good sign that stocks demand is increasing, leading to a higher price. On the contrary, if a stock begins to accumulate more sell orders than buy orders, it shows a negative sentiment and results in the stock price decreasing. A less sophisticated chart would only show individual orders in a list on the trading screen, but not TotalView. TotalView will tally up all of the aggregate buy/sell orders and automatically calculate the total number for you. In essence, TotalView takes the mathematical pain out of it and only gives you the analysis.
TotalView's real-time market data streamlines precise prices for securities so you are spot on with entry/exit points. This is different from some other brokers that have quotes delayed up to 15 minutes. Not TotalView!
Webull offers a referral system for its second level charting platform so you can invite friends and earn points. Points give you a higher ranking among other users and additional benefits on the platform. Mostly, they are to show you are a contributing member of Webull's strong community.
Commissions are charged by brokers when executing buy and sell orders for a security. Some brokers charge commissions up to $10 per trade! Luckily for you, on Webull and its TradingView platform, you will pay no extra commissions on your stock and ETF purchase and sell orders. This is especially significant because most brokers that offer level 2 trading price their commissions at high levels. Not Webull!
Now that you know more about TotalView and some of its distinct features, the next step in your trading journey is to sign up. But exactly how do you do that? I'll show you now!
After following these four simple steps, you should be all set to begin trading on Webull's second level platform
Lucky for you, Webull tries to keep its fees down as much as possible for its users. This extends to TotalView as well, costing nothing extra on Webull's trading platform. There are still some fees that you should be aware of, however, when trading with Webull. Let's go over some of them now.
Margin is money that is borrowed from a bank or broker that has to be paid back. This margin can be used to trade stocks and ETFs on Webull's trading platform and with TotalView. The rate that margin has to be paid back is based on the interest rate at which you take it out. On Webull, these rates vary. If you are looking to take out between $0-$25,000 in margin from Webull, you will be charged a 6.99% annual margin rate. This interest rate scales down as the amount of margin you are seeking to take out increases. The highest amount of margin you are allowed to take out on Webull is $3,000,000 and the annual interest rate is 3.99%. Remember that even with highly technical trading features such as TotalView, there is still inherent risk in taking out margin. So, be careful and use it correctly if you are thinking about investing on margin!
For a highly technical and in-depth level II trading platform, Webull's TotalView shines. By offering a sophisticated yet simple way to analyze the second level, Webull's TotalView feature gives you a market edge without the added headaches of traditional level II platforms. If you are somebody who values precise orders, entries into your trades, and exits, TotalView may be a great option for you. If instead, you are focused on technical charting features and analysis, there are several other brokers that offer these features as well. At the end of the day, I'm a huge fan of TotalView, but that doesn't mean you have to be as well! Find what trading strategies work for you and figure out if TotalView fits into your trading system. If it does, maybe you found a new feature to enhance your profits! If not, there are many other options and features you can look elsewhere.
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