Level 3

AAA

DEFINITION of 'Level 3'

A trading service consisting of everything in Level 2, plus the ability to enter quotes, execute orders and send information. This service is restricted to NASD member firms that function as registered market makers.

Also know as "Level III".

INVESTOPEDIA EXPLAINS 'Level 3'

This allows you to enter bid/ask quotes as the trades are being executed right in front of you. It's the fastest way to execute a trade.

RELATED TERMS
  1. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  2. Level 2

    A trading service consisting of real-time access to the quotations ...
  3. Level 1

    A trading service that displays real-time bid/ask quotes and ...
  4. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
  5. Paper Trade

    Using simulated trading to practice buying and selling securities ...
  6. Ring Trading

    The method by which certain types of investment business is conducted ...
RELATED FAQS
  1. What's the difference between an index fund and an ETF?

    Learning investing basics includes understanding the difference between an index fund and an exchange-traded fund, or ETF. ... Read Full Answer >>
  2. What commodities are not tradable?

    As of February 2015, commodities that are not tradable include diamonds, tomatoes, carbon dioxide, lemons, eggs, potatoes, ... Read Full Answer >>
  3. How does investing in the banking sector differ between the U.S. and Canada?

    Banks in the U.S. and Canada offer different sets of pros and cons for investors. Shares of all Canadian banks are traded ... Read Full Answer >>
  4. How do I place a limit order online?

    Nearly all trading orders can be placed online through a trading platform usually provided by a broker. A limit order is ... Read Full Answer >>
  5. How do you trade put options on E*TRADE?

    To trade put options with E-trade it is necessary to have an approved margin account. Investors may sign up for margin accounts ... Read Full Answer >>
  6. How do you trade put options on Ameritrade?

    To trade put options with TD Ameritrade, you need a margin account funded with more than $2,000 that is authorized to trade ... Read Full Answer >>
Related Articles
  1. Professionals

    How Brokers Can Avoid A Market-Maker's Tricks

    Ensure that you and your clients are getting the best deal by avoiding these three pitfalls.
  2. Retirement

    Electronic Trading Tutorial

    Learn about the systems that run the market. Topics include market makers, specialists, SuperDOT, ECNs, SOES, Level I, II, and III Access, and more.
  3. Trading Systems & Software

    Make Money Through Risk Arbitrage Trading

    Risk arbitrage provides a valuable trading strategy for M&A or other corporate actions eligible stocks. Investopedia explains how it works.
  4. Trading Strategies

    Pros And Cons Of Paper Trading

    Most market novices should paper trade for a considerable amount of time, despite key drawbacks.
  5. Trading Systems & Software

    The Fast-Paced World of Libor & Fixed Income Arbitrage

    LIBOR is an essential part of implementing the swap spread arbitrage strategy for fixed income arbitrage. Here is a step-by-step explanation of how it works.
  6. Trading Systems & Software

    How New Traders Can Downplay Costs

    Concentrate on learning to play the game well in your first year as a trader, avoiding high information costs.
  7. Trading Systems & Software

    6 Brokers That Will Pay You To Trade With Them

    We review six leading online brokers that are offering cash bonuses for opening a new account.
  8. Trading Systems & Software

    Average Rate Of Return For Day Traders

    A look into the question of day trader earnings and factors that play a role in trading success.
  9. Trading Systems & Software

    How To Trade In The Hong Kong Stock Exchange

    The Hong Kong Stock Exchange may soon become the third-largest exchange in the world.
  10. Trading Systems & Software

    Want To Trade Stocks In College? 5 Tips To Start

    Investing while in college can be challenging. Here are 5 tips to help student investors make the most of their college years.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!