Both Level 2 pricing and direct market access methods have only recently been made available widely to private investors. Whilst not yet a mass market product, the use of Level 2 data is certainly growing fast – according to the London Stock Exchange, there has been a 400% increase in usage in the last 18 months. The average number of trades on the London Stock Exchange’s trading platform during October 2007 was 573,767, up 73% on October 2006.
Level 1 pricing will enable investors to see the bid, offer and the day’s high and low prices of specific stocks in real time, versus delayed pricing information that is traditionally used by retail brokers. Level 2 is a more recent phenomenon and allows investors to view the order book; the actual buy and sell orders for each share in the market as they are entered, amended and executed in real time.
Stephen Grady, head of global dealing at Barclays Wealth, said: We expect to see fast evolution in this market over the next few years. Investors are increasingly demanding quicker, transparent and more sophisticated techniques to access the markets. We have seen a real shift in recent years in terms of the techniques and products that our clients are using to gain returns. We are in continuous dialogue with our client base which enables us to shape our platform according to their demands as they become increasingly sophisticated.
