I have a similar situation with my current students. They are currently at preschool level, but also reading level 2 books with full comprehension. They have begun a regular preschool, however, similar to your daughter, they are much more advanced than the other children in their class. I would recommend that you speak to the teachers and see how she is doing - don't be afraid to communicate with the school as to your concerns. Advanced placement is always an option, but I will say it can sometimes be rather difficult socially for the children. There are specialized programs and schools for children who are advanced as well, but often it requires a certain score on formal assessments to determine the child's IQ and cognitive functioning skills (expensive and done by a certified psychologist). In the meantime, I would suggest that you try some 'enrichment' activities with her at home. Whatever she has learned at school, take an extra step and expand upon it. If they are working on sight words, have her locate all her sight words in the books she has at home, and then have her show you the context, or where they are in regard to the sentence (i.e. the word 'and' is joining the words 'jump' and 'play' to describe what the kids are doing). If they are learning about flowers, discuss the parts of a flower, and the different types which grow in the garden. etc. I will see if I can find the websites I have used with my students and respond again with some links I have. Good luck to you!