Understanding Order Book and Market Depth

What is an Order Book?

• An order book is a real-time electronic list of buy and sell orders for a specific asset, organized by price level.
• It shows buyers' and sellers' interests and illustrates the relationship between them by displaying outstanding orders for an asset in real-time.
• The quantity of orders at each price point, known as market depth, is also listed.
• This provides vital trading information and enhances market transparency. The depth and liquidity of the order book play a key role in price discovery.

 

How Does an Order Book Work?

• Most exchanges use order books to list orders for assets like stocks, bonds, currencies, and cryptocurrencies.
• Buy and sell information is shown at the right of the screen.
• An order book is updated in real-time throughout the day, reflecting the current intentions of market participants.
• Typically, an order book has four components: buy orders, sell orders, price, and size:
  • Buy orders show the bids (bid price) (the amount buyers wish to purchase).
  • Sell orders show the offers (ask price) (the amount sellers wish to sell).
  • Each price level displays the quantity of orders (size) participants are willing to buy or sell.
  • The highest bid and lowest ask prices are at the top of the book. The RKX order book also shows the cumulative size of liquidity for both the buy and sell sides up to the top of the book.
• Order books help traders make informed decisions by showing order imbalances, which can provide insights into short-term price movements.

How to customize the order book display?

You can customize the order book display using various tools.

1. For example, you can adjust how prices are displayed by selecting [0.001] at the top right, which will show prices with 3 decimal places.

 

2. You can click on a price in the order book to place a limit order. For example, if you click on 87,466.31 USDT, that price will automatically appear in the [Limit] order section for your order.

Market Depth

The market depth chart provides a visual representation of the order book. It indicates a cryptocurrency’s real-time supply and demand at various price points. A market depth chart takes the form of a standard graph with horizontal (x) and vertical (y) axes. 

 

 

Disclaimer

This content is provided for informational purposes only and may reference products or services not available in your region/jurisdiction. It does not constitute investment, legal, tax, or financial advice, nor an offer to buy, sell, or hold any digital assets. Crypto assets, including stablecoins and NFTs, carry high risk and can be highly volatile. Please assess your financial situation carefully and consult a qualified professional advisor for guidance before making any decisions. While we made efforts to ensure accuracy of this content, we make no guarantees about completeness or reliability and disclaim all liability for any errors or omissions.