Technical Definition
Order book
An order book is a list of open buy and sell orders arranged by price on a trading venue.
By Crypto University Editorial
Limit orderMarket orderLiquidity
✦ Key Insight
Order-book depth affects spreads, slippage, and how easily large trades can be executed without moving the price.
✕ Common Misconceptions
Displayed liquidity can change rapidly. Large visible orders may be cancelled, and the price shown on screen does not guarantee your execution price.
Detailed Explanation
Buyers place bids indicating what they are willing to pay, while sellers place asks indicating what they will accept. The order book shows how much liquidity is available at different prices.
In Practice
“If the highest BTC bid is $100,000 and the lowest ask is $100,010, the spread is $10.”
Dig Deeper
Liquidity
Liquidity describes how easily an asset can be bought or sold in meaningful size without causing a large change in price.
Market order
A market order instructs a trading venue to buy or sell immediately using the best available prices.
Limit order
A limit order instructs a trading venue to buy or sell only at a specified price or better.