predict the short-term movement of a share or security in conjunction with volume traded, and attempt to profit from this information, which is usually legal as the information is in the public domain. The reason for this is that market makers sit “behind” such a screen by being obliged to both buy and sell the share at the posted price up to what is known as normal market size. For certain market centers such as NASDAQ, a full depth-of-book (DOB) is available, whereby every quotation for every market participant is displayed. UK Level 2 The stock exchange electronic trading system (SETS) is an electronic order-driven system for trading the UK bluechip stocks including FTSE 100 and FTSEurofirst 300 stocks. The SETS order book matches buy and sell orders on a price/time priority. On SEAQ, all buys and sells go through a market maker who acts as an intermediary. The basis of SETS is that it directly matches willing buyers and sellers, creating efficiency in the markets by doing away with the intermediary of the market maker. This efficiency is true while the SETS system is populated by the most liquid and heavily traded stocks, but if matched bargains operate on less liquid stocks, waiting for a buyer to match with a seller could take hours, days or weeks. Because of the efficiency of the SETS system stocks traded tend to have narrow spreads so the cost of entry and exit from a position is much smaller. As an individual investor, should you wish to buy or sell a SETS stock, your broker will invariably still trade through a market maker, who will not display separate prices but simply use the SETS Level 2 screen to indicate where the market lies. See also Market data Stock exchange References External links Level I and Level II Quotes Electronic Trading: Level I, II and III Access Financial markets