Webull often comes up in my articles as a top free stock trading platform because it acts as a commission-free service, has no minimum threshold for investing and has useful analytical tools.
Unlike Robinhood, apps like Webull offer commission-free trades on several asset categories and pair this with in-depth analytics for you to trade on data-driven decisions.
Recently, Webull joined into a strategic partnership with NASDAQ to provide all of their clients with premier Level 2 market data. As a result, users can now gain access to Level 2 Advance, powered by NASDAQ TotalView.
This increased amount of accessible data provides investors with many more pieces to the elaborate investing puzzle. In this overview, I will discuss Level 2 Advance, how TotalView works, and whether or not investors should give it a try.
What are the Benefits of Webull’s Level 2 Advance?
The average, casual investor bases investment decisions on much less in-depth information than professional investors have available.
NASDAQ’s TotalView works to level the playing field and give all market participants the same amount of data to reduce surprises when the market opens and closes.
According to NASDAQ’s Senior Vice President and Head of Strategic Partnerships for Global Information Services, Oliver Albers, “NASDAQ works to make sure the world’s financial markets are accessible to all.
NASDAQ TotalView gives users great insight into equity markets to help them make more informed decisions. Our work with Webull is vital to expanding access to U.S. equity markets to investors everywhere.”
An order book, also referred to as the Depth of Market (DOM), displays the amount of open buy and sell orders at various prices for a security.
For example, if a security currently trades for $5, TotalView allows you to see how many orders traders would place at various prices above and below, such as the number of shares available at $4.50, $5.25, etc.
Depth-of-book refers to the robustness of the order book (higher the quantity, the more robust the order book).
→ View Complete Depth-of-Book
One of the main benefits TotalView offers is the ability to view the complete depth-of-book with NASDAQ’s best 30+ bids and offers.
This information lets you see locations of orders placed, how they bunch in real time, as well as how the bids and asks feed into the changing stock price.
Basically, this shows supply and demand as it adjusts in the security in real-time. Based on this activity, you get an improved sense of future price movements, not to be confused with stock market futures.
You can choose to access the Webull order book level by price or by individual orders.
→ Follow the Largest Liquidity Pool in Real-Time
All investors want to be able to anticipate where the market is going and TotalView can help. Within the United States, NASDAQ is the largest single liquidity pool.
With TotalView, you can follow pockets of liquidity over time to better understand how orders are distributed in the market. This understanding aids you to identify new trading opportunities.
→ Gain Access to Net Order Imbalance Indicator (NOII) Data
Traders gain access to Net Order Imbalance Indicator (NOII) data in real time before the official open and close. Viewing accurate broadcasts of what the likely opening and closing prices will be ahead of time can reveal valuable trading opportunities.
The Auction Crossing NOII provides investors transparency in not just into the opening cross and closing cross, but also Initial Public Offerings (IPOs) and halt crosses. Let’s look a bit more closely into how this works.
For a quick overview of how the service works and what you can expect to learn by using this powerful stock research tool, have a look at the video below.
TotalView’s Auction Process and Crosses
NOII goes through a substantial amount of data and performs various calculations to make opening and closing predictions for you.
Step 1: Auction Process & Crosses
The auction order book combines all eligible orders at each price level. Buy orders are calculated by adding the order quantity up to that price level. Sell orders are calculated by adding up the order quantity at or greater than that price level.
Step 2: Indicative Cross Orders
The value of indicative cross orders is the number of orders that are eligible to be matched at each of the price levels. It’s the lower one of the aggregate buy or sell orders at each price level.
Step 3: Determine the Reference Price
At the end of the auction window, the auction runs with the goal of maximizing the quantity of shares crossed, while still respecting the different limits on orders.
Step 4: Find Imbalance Side
The amount of indicative cross orders, based on the reference price, is the number of paired (“matched”) shares. The difference between the aggregate buy orders and the sell order at the reference price level is the value of the “imbalance shares.”
The imbalance quantity is the number of opening or closing shares that wouldn’t get executed at the current reference price. The ”imbalance side” tells you whether a buy-side or sell-side imbalance exists or if there is no imbalance.
If there are imbalance shares at the reference price level, the auction continues to look for a crossing price that will clear the imbalance shares or maximize matched shares.
The “near indicative clearing price” is the crossing point that uses the auction orders as well as the continuous market orders. This price is largely representative of where the auction will end up executing.
The “far indicative clearing price” is the crossing price that only uses auction orders.
How Much is the Webull Level 2 Cost?
The Webull Level 2 price is free for the first 3 months when opening a new account but can be purchased afterward for $1.99/month.
Should You Try Webull’s Level 2 Advance?
If you’re new to investing and just getting started on your journey, the Level Two Advance on Webull might feel overwhelming to you. I would suggest getting more familiar with the basics of the Webull app first until you feel more comfortable.
TotalView assists more sophisticated traders who already know the basics of trading, but want to elevate to the next level.
If you’re an already active trader who wants to make more informed trading decisions, you should definitely consider trying Webull’s Level Two Advance. Serious traders can glean a lot of useful information for trading decisions.
Users can try this more professional level for free for the first three months. After that, the cost comes to $1.99 per month. The Level 1 data only shows one set of bid and ask numbers, so that low price provides you 29 more. Learn more about how Webull makes money.
You can access this stock investment software from mobile, desktop, or an iPad. Trading can be stressful, but the more about a potential trade that is visible to you, the more confidence you can have in that trade.
Always do your due diligence when choosing the best investments.
For Beginner Investors, Start Here First
For those beginning their investing journey who wish to start by following a buy and hold strategy, consider investing in the following asset types:
- Index funds
- Target date funds
- Income-generating assets
- Alternative investment options
- Assets that appreciate in value
You can hold several of these investment vehicles in the numerous types of investment accounts available to investors. Make sure to diversify across several types of assets and accounts to protect against any unexpected volatility.
You might also wish to learn more about how individual stocks trade and how stock news plays a part but without making a significant capital investment.
You might consider beginning to trade penny stocks on Webull but have significant self-control over how much money you wish to put at-risk in your trading.
With time, you’ll learn how to follow stock price movements and can leverage the data insights provided by Level Two Advance on Webull.
What are the Tax Consequences for Trading Stocks?
If you trade stocks on an active basis, you should have awareness of the tax implications involved. More broadly speaking, let’s discuss the tax impact of investing in stocks in general by reviewing some of the applicable rules affecting stock trading.
Of special note, I want to call attention to the most applicable tax consequence associated with trading stocks: the capital gains/loss tax. This tax occurs when you sell a stock for a gain or for a loss.
Depending on how long you held the stock, the type of tax can fall into one of two categories:
- Short-Term Capital Gain/Loss: If you recognize a gain by selling an investment you held for under a year for a higher price than you originally paid, you will pay taxes on this in your usual marginal income tax bracket. This means if your top tax bracket was 22%, you will pay this amount of tax on your gain. Likewise, if you sell for a loss, you will realize a short-term capital loss which offsets your income, up to $3,000 per year.
- Long Term Capital Gain/Loss: You face this tax when you sell an investment you held for over a year for a gain. These rates can be more advantageous than short-term capital gains because they vary from 0% to 20%.
When you trade stocks on Webull for a profit, this gain technically counts as taxable income and you should report it on your tax return. This gain will count as ordinary income if you held it for under a year (i.e., like the money you make through your paycheck).
Make sure you account for these tax effects when you trade stocks on a regular basis.
About the Site Author and Blog
In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time. My job routinely required extended work hours, complex assignments, and tight deadlines. Seeking to maintain my momentum, I wanted to chase something ambitious.
I chose to start this financial independence blog as my next step, recognizing both the challenge and opportunity. I launched the site with encouragement from my wife as a means to lay out our financial independence journey and connect with and help others who share the same goal.
I have not been compensated by any of the companies listed in this post at the time of this writing. Any recommendations made by me are my own. Should you choose to act on them, please see the disclaimer on my About Young and the Invested page.