Order book
Also called: depth, level 2
An order book is the live list of buy and sell orders waiting at each price for a stock.
Depth is how many shares are waiting near the current price. Deep books absorb big orders with little price change; thin books move sharply.
Related terms
- Bid-ask spread: The bid is the highest price a buyer will pay right now, the ask is the lowest price a seller will accept, and the spread is the gap between them.
- Limit order: A limit order buys or sells only at a set price or better, so you control the price but it may never fill.
- Liquidity: Liquidity is how easily something can be bought or sold quickly without moving its price much.
- Automated market maker (AMM): An automated market maker is a pricing formula that always quotes a price to buy or sell, instead of matching buyers with sellers in an order book.
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