What is a Level III Quote?

A level III quote is pricing information made available to registered Nasdaq market makers.

How Does a Level III Quote Work?

A level III quote for Company XYZ stock would include the real-time bid price, ask price, quote size, price of the last trade, size of the last trade, high price for the day and low price for the day. It would also include a ranked list of the real-time best bid and ask prices from participating market makers, who are identified via a four-letter abbreviation.

Level III quotes come from the securities dealers that make up the market. Level III quotes are restricted to registered Nasdaq market makers.

Why Does a Level III Quote Matter?

Level III quotes are the vortex of the trading system because they allow users to directly execute trades. For this reason, level III quotes are generally only available on trading floors at brokerage firms of registered Nasdaq market makers.

A level III quote allows a market maker to change its bids, offers, and order sizes for securities in which it makes a market, as well as execute orders, change quotes, and send out trade confirmations.

Ask an Expert about Level III Quote

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Level III Quote.

Be the first to ask a question

If you have a question about Level III Quote, then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users