Lightspeed Trader Tip of The Week, Level 2 Window

Lightspeed Trader helps you easily identify when a stock is nearing the Limit Up-Limit Down level which would trigger a trading halt.

The Level 2 window will display the LULD price levels on the bid or offer to provide you with this information. To add the Level 2 window to Lightspeed Trader simply click on Window at the top of the platform and then Level 2. Click in the top section of the new window and type the symbol you wish to view. You can highlight LULD in the MM box settings as well (shown below).

What is Limit Up-Limit Down?

On April 5, 2011, national securities exchanges and the Financial Industry Regulatory Authority, Inc. (FINRA) filed a proposal to establish a new “limit up-limit down” rule to address extraordinary market volatility in U.S. equity markets. The Limit Up-Limit Down (LULD) mechanism is intended to prevent trades in National Market System (NMS) securities from occurring outside of specified price bands. The bands would be set at a percentage level above and below the average reference price of the security over the immediately preceding five-minute period. To accommodate more fundamental price moves, there would be a five-minute trading pause – similar to the pause triggered by the current single-stock circuit breakers – only if trading is unable to occur within the specified price band after 15 seconds. On May 31, 2012, the SEC approved the NMS Plan on a pilot basis.