# How to read Level 2 in Scalpel

> Read Scalpel's DAS-style Level 2: bids left, asks right, a colour band per price, venues, spread, imbalance and delta, and reading players by behaviour.

Source: https://scalpeltrade.com/guides/read-level-2
Guide 3.1, Reading the market. Beginner, 10 min read.
Checked with Scalpel 1.12.8 on 2026-10-15. By Scalpel Team.

**In short:**

Scalpel's Level 2 is a DAS-style montage: bids on the left, asks on the right, one row per venue, best price at the top, and every price level in its own colour band, so the inside bid and ask sit side by side in the middle. Above the book are the quote, a summary of the spread and both sides' size, the imbalance and the buy-minus-sell delta; on the right is the tape. Use it to see who is willing to buy and sell at each price and who is actually trading, not as a forecast.

Level 2 (also called market depth or the order book) shows the limit orders waiting to be filled at each price, not just the best bid and ask. For a scalper that answers the questions that matter on every trade: how much is it going to cost me to get in and out, how much stock is between me and the next level, and is anyone actually buying?

**Before you start:**

- A real-time Level 2 subscription on your IBKR account, or the book stays empty ([guide 1.6](https://scalpeltrade.com/guides/ibkr-market-data-for-day-trading)).
- A symbol loaded on a desk ([guide 2.1](https://scalpeltrade.com/guides/load-symbols-and-desks)).

## The Level 2 panel at a glance

*Screenshot: The LEVEL 2 panel for ABCD with a 400-share long: the quote (1), the summary bar (2), the read strip (3), your position (4), the bids (5), the asks (6), the tape (7) and the grouping stepper and cog (8). Demo data.*

| # | Part | What it tells you |
|---|---|---|
| (1) | Quote header | The symbol in the desk's colour, the company name, the change from yesterday's close in dollars and percent, and the last price, green when up on the day and red when down. Under it: **O** (open), **H** (high), **L** (low), **VWAP** and **VOL** (volume). |
| (2) | Summary bar | **BID VOL** and **ASK VOL** (all the shares on each side of the book), **BEST BID**, **SPREAD** in dollars and as a percent, and **BEST ASK**. |
| (3) | Read strip | The **IMBALANCE** gauge, **DELTA** over 10 seconds, 1 minute and 5 minutes, and the read line in plain words. |
| (4) | Position strip | Only while you hold the stock: **LONG**, the shares, your average price in large type and your open P&L, on green in profit and red in a loss. |
| (5) (6) | The book | Bids left, asks right, mirrored around the middle. |
| (7) | Tape | Every trade as it prints, newest on top ([guide 3.3](https://scalpeltrade.com/guides/read-time-and-sales)). |
| (8) | Stepper and cog | **-** **Tick** **+** merges price levels; the cog opens the panel's settings ([guide 2.3](https://scalpeltrade.com/guides/panel-settings)). |

## A DAS-style montage

The layout follows the montage style momentum traders know from DAS Trader: two columns facing each other, one row per venue, coloured by price level. (Scalpel is independent and not affiliated with DAS.)

- **Bids on the left, asks on the right.** Each side reads **MMID**, size, price from the outside in, so the best bid and the best ask are next to each other in the centre, where your eye lands.
- **Best price at the top.** The bids fall in price as you read down; the asks rise.
- **One row per venue.** Three venues bidding 5.69 are three rows.
- **One colour band per price.** By default every row at the same price shares a solid colour: green at the inside, then salmon, yellow, cyan, orange and lavender as the price steps away, then round again. Both sides start with green at the inside.

So you can read the book in shapes, not numbers. Three green rows at the bid and one at the ask: buyers are stacked at the inside and only one venue is offering. A long salmon band on the ask is a lot of sellers one cent up.

*Screenshot: The same bid side by price tier (the default), by venue, and with colouring off. Off is the only mode that shows the gold touch, grey depth bars and amber big orders. Demo data.*

Change the colouring in the LEVEL 2 cog: **By price tier**, **By venue** or **Off** ([guide 2.3](https://scalpeltrade.com/guides/panel-settings#the-three-colouring-modes)).

### What the venue codes are

The **MMID** column is the venue the order rests on, for example **NSDQ** (Nasdaq), **ARCA** (NYSE Arca), **EDGX** and **BATS** (Cboe exchanges), **IEX**, **MEMX** and **NYSE**. Interactive Brokers' depth gathers every lit exchange's book into one view and labels each row with its venue. It does **not** tell you which firm or trader placed an order. A row that says **ARCA** might be a market maker, a fund's algorithm or another day trader. See the glossary for [MMID](https://scalpeltrade.com/guides/glossary#mmid).

## The numbers above the book

**SPREAD** is the gap between the best ask and the best bid, in dollars and as a percent of the middle price. In the shot, 5.71 - 5.69 = 0.02, or 0.35%. Buying at the ask and selling at the bid costs you the whole spread on every round trip, so a 0.35% spread on a scalp you hope makes 2% takes a sixth of it before anything else.

**BID VOL** and **ASK VOL** add up every share on each side of the book Interactive Brokers sends. Turn on **Dollar value instead of size** and they become **BID VALUE** and **ASK VALUE**.

**IMBALANCE** compares the size on the bid with the size on the ask, weighting the levels near the inside more: the first row counts in full, the second half, the third a third, and so on, over the rows you show. It runs from +100% (all bids) to -100% (all asks). The gauge fills left in green for a bid-heavy book and right in red for an ask-heavy one; within 12% either way it reads as balanced.

**DELTA** is the shares bought at the ask minus the shares sold at the bid over the last 10 seconds, 1 minute and 5 minutes of today's tape. Trades between the bid and ask are left out. **+4.2K** over 1 minute means buyers lifted 4,200 more shares than sellers hit. It is the same number the chart's Delta sub-pane draws over time ([glossary: delta](https://scalpeltrade.com/guides/glossary#delta)).

The read line under them puts the book and the tape into words, such as **Bid-heavy book, buyers lifting**. It describes; it does not predict ([guide 3.6](https://scalpeltrade.com/guides/read-line-and-read-bar)).

## How to use it on a long

Scalpel is long only, so read the book for three questions: can I get in at a fair price, is there room to go up, and can I get out?

1. **Check the spread.** Wide spread, smaller size or no trade. A 5c spread on a $3 stock costs you 1.7% on every round trip.
2. **Look at the ask above you.** How many shares sit in the first two or three bands? A thin ask means buyers can push through quickly. A thick band, or one venue with a much bigger order than the rest, is where the move can stall.
3. **Watch the tape against the ask.** Prints at the ask (green on the tape, positive delta) eating through the offers is buying pressure you can see. Size on the ask that keeps refreshing while it trades is a seller absorbing that buying ([guide 3.2](https://scalpeltrade.com/guides/iceberg-orders)).
4. **Look at the bid under you before you buy.** Your exit is a sell into the bids. If the bid side is a few hundred shares spread over many cents, a fast exit will slip. Size so you could get out ([the thin bid exit warning](#the-thin-bid-exit-warning) does the maths for you while you hold).
5. **While you hold, watch the bid.** Bids stepping up behind the price are buyers following it. Bids pulling away, and the read line turning **Ask-heavy book**, are the time to tighten up, not to hope.

Your buy is a marketable limit at the ask plus your offset ([guide 4.4](https://scalpeltrade.com/guides/entries-and-fills)), so the ask is the price you will pay: read it before you press.

## Reading players from behaviour

Since the book shows venues, not firms, "players" are read from what an order does, not its name:

- **A venue refilling the same price** while far more trades there than it ever shows: a hidden (iceberg) order. Scalpel marks it with a layers icon ([guide 3.2](https://scalpeltrade.com/guides/iceberg-orders)).
- **Unusual size on one venue**: with colouring **Off**, a row at least three times the average size shown (and 1,000 shares or more) has its size in amber.
- **Size that appears and vanishes** as price comes near: watch the flashes, green as size is added and red as it is pulled. Size that leaves before it trades was never willing to trade there.
- **Bids stepping up** cent by cent behind the price: buyers chasing it.
- **An ask-heavy book capping price**: the one read that held up in replay, coloured gold on the read line.
- **Who is taking**: the tape and the delta show whether buyers are lifting the ask or sellers are hitting the bid.

[Guide 3.7](https://scalpeltrade.com/guides/read-the-players) goes through each of these with examples.

**Note: The honest limits.**

When the book and tape reads were replayed over recorded sessions, most "this means up" calls did no better than a coin flip, and a level with a hidden buyer broke within a minute more often than an ordinary one. The book can change in milliseconds, size can be pulled before you reach it, and part of every stock's volume trades off-exchange where no book shows it. Use Level 2 to judge cost, room and liquidity, not to predict. The blog post [Reading the Level 2 montage](https://scalpeltrade.com/blog/reading-the-level-2-montage) has the replay results.

## The thin bid exit warning

While you hold a long, Scalpel works out what selling the whole position into the bids shown would cost: it walks down the bid side, filling your shares level by level, and compares your average fill with the best bid. At 0.6% or worse, three things happen:

- a red strip under your position: **Exit carefully: poor bid-side liquidity (~2.8% slippage)**,
- a red toast, for example **MNOP: thin bid side, exit carefully**,
- a voice warning.

*Screenshot: 4,000 shares long over a thin bid. Selling them all into this book would average about 2.32 against a 2.39 best bid, so the strip and the toast warn. Demo data.*

In the example, the first eight bid rows hold exactly 4,000 shares from 2.39 down to 2.28. Selling into them averages about 2.324, which is 2.8% under the 2.39 bid. If the visible bids cannot take the whole position at all, Scalpel reports at least 2%.

The toast and voice fire once when the warning starts, and again only after it has cleared (at most every 12 seconds). The strip stays while it applies. Switch them off with **Thin bid exit warning** in the LEVEL 2 cog.

What to do about it: scale out in pieces rather than dumping the whole position ([guide 4.5](https://scalpeltrade.com/guides/scale-out-and-flatten)), and next time size smaller on a stock with a thin bid.

## What can go wrong

- **The book is empty but the chart works.** No Level 2 subscription, or a **Depth unavailable** toast because you are at your account's limit of books ([guide 13.4](https://scalpeltrade.com/guides/fix-delayed-data)).
- **The book is 15 minutes old.** The header says **DELAYED** ([guide 2.5](https://scalpeltrade.com/guides/desk-status-badges)).
- **You bought and the price dropped through a "wall" of bids.** Bids are not promises: they can be cancelled before your sell reaches them.

Trading small-cap momentum this way is fast, difficult and risky, and many people who try it lose money. Practise reading the book in SIM against the live market first ([guide 6.1](https://scalpeltrade.com/guides/paper-trading-sim)).

## Questions

**How do I read Level 2?**

Bids are on the left and asks on the right, best price at the top, so the inside bid and ask meet in the middle. Each row is one venue's order at one price; each price has its own colour band. Compare the size on each side near the inside, watch which side the tape is trading into, and check the bid under you before you buy.

**Can I see which market maker or firm is on the book?**

No. Interactive Brokers' depth shows the venue each order rests on, such as ARCA, NSDQ or EDGX, not the firm behind it. Players are read from behaviour: refills, unusual size, size that is pulled, and who is trading on the tape.

**What do the colours on Scalpel's Level 2 mean?**

By default each price level is a band of colour: green at the inside, then salmon, yellow, cyan, orange and lavender as the price steps away. The cog can colour by venue instead, or turn colouring off.

**What is the imbalance percentage?**

Bid size against ask size near the inside, with closer levels weighted more, from +100% (all bids) to -100% (all asks). Within 12% either way it reads as balanced.

**Is a big bid on Level 2 support?**

Not reliably. It can be cancelled at any moment, and in replay even hidden buyers refilling a bid did not hold the level more often than chance. Treat it as information about who is there now.

**Does Scalpel's Level 2 need a paid data subscription?**

It needs Interactive Brokers' real-time Level 2 for the exchanges you trade, which you add in IBKR's Client Portal. Scalpel itself needs no other data feed.