>My question is on Level II, you will see both
>ISLAND and ISLD. Can someone explain the
>difference? I mean they can't both be the
>Island ECN, right?
Hang on, it's could get ugly and I'm just going to scratch the surface.
Yes, ISLD and ISLAND are the same ECN. The difference lies in where the data comes from and how it is aggregated.
ISLD is the official Nasdaq symbol for the Island ECN. You will see this symbol no more than twice on your LVL2 (once each on Bid/Offer) and is the aggregate reflection of all shares at the best displayable price from the Island ECN. This little slice of data on your screen comes to you through the Naz data feed and is subject to their display rules (can't cross/lock the market, even penny price increments, even hundred volume increments.)
ISLAND is the display symbol for the direct RT connection to the Island book and is an (almost) exact reflection of that book integrated into your LVL2 display. As it is not subject to the Naz display rules, these display lines can go sub-penny, partials and small lots (odd or less than 100) and cross/lock the market. All orders are displayed separately. This data often reaches you quicker than the Naz routed data.
If you haven't already visited
www.Island.com, do so during market hours and you will see the entire Island book displayed alone in a familiar LVL2 format. This will help you to understand what comes next.
Let's use an AMAT example. Individual column layout choices may effect the way your screen looks, but you'll get the picture. I have added some line numbers on the left to facilitate later reference and I am only going to use the Bid side of the LVL2.
AMAT is trading at 40.00 x 40.05 NBBO (National Best Bid/Offer)
Island Book displays the following
#01| 50 ----- 39.99
#02| 150 ---- 39.98
#03| 200 ---- 39.97
#04| 300 ---- 39.96
Your LVL2 will look something like the following:
#05| GSCO ----- 40.00 --- 1
#06| ISLAND --- 39.99 --- 50s
#07| RSSF ------ 39.98 --- 5
#08| ISLD ------- 39.98 --- 2
#09| ISLAND --- 39.98 --- 150s
#10| ISLAND --- 39.97 --- 2
#11| NITE ------ 39.96 --- 10
#12| ISLAND --- 39.96 --- 3
#13| PRUS ------ 39.96 --- 1
(On RT, when you see a "s" behind the share volume, you read it literally rather than multiply by 100)
So, you can see that the ISLAND lines reflect exactly what is displayed on the Island book and are integrated with the Naz LVL 2 data by a price/volume sort. What is confusing to most beginners is that pesky ISLD line (#8).
Of course, ISLD is the only one of the Island data lines that is coming through the Naz and in this case, line #8 is the aggregate of lines #01 and #02 from the Island book. Line #01 can't be displayed individually by Naz (less than 100 shares), but it can be combined with #02 to create an displayable order for 200 shares of 39.98 (seller would receive price improvement on 50 of the shares).
Many traders don't have the Island book integrated into their LVL2 (I turn mine off in RT) and they of course only see the one ISLD entry.
I could go on forever with interesting (for some) examples that showcase LVL2 oddities. But I've got to get on with my Hang Gliding Sunday. It can get REALLY interesting for beginners when you get into crossed and locked markets.
Though I am most familiar with Island, I believe that most of what I described above applies to other ECNs such as Archipelago (ARCA, Archip) and Redibook (REDI).
It was long and written fast, so please weigh in if anyone finds mistakes.
JB
