What is Order book?
The standing bids and asks at each price on an exchange, and the size waiting there.
An order book lists resting buy orders (bids) below the price and sell orders (asks) above it. The best bid and best ask define the spread; the size at each level is the depth.
Depth is what a market order consumes. A thin book means the same trade moves the price further, which is why liquidity is part of the risk score.
Related terms
- Bid–ask spreadTrading
The gap between the highest buy order and the lowest sell order: a cost you pay to trade now.
- SlippageTrading
The difference between the price you expected and the price you got, from moving the book yourself.
- LiquidityTrading
How easily you can buy or sell without moving the price: depth, spread and turnover together.