What is an order book?
An order book is a live list of all open buy and sell orders for one asset on one trading venue, sorted by price. Buy orders (bids) sit on one side, sell orders (asks) on the other, and the exchange matches them to create trades, which is how the current market price is set.
What is an order book, in plain words?
An order book is the waiting room of a market. Every buyer who wants to pay a specific price, and every seller who wants to receive one, leaves an order there until someone on the other side accepts it. The order book lists those orders by price level, with the quantity waiting at each level.
It is different from a price chart. A chart shows what has already traded. The order book shows what market participants are willing to do next: how much they want to buy or sell, and at what price.
Stock exchanges, futures markets and centralised crypto exchanges all run order books. On a crypto exchange you can usually see it in the advanced trading view; it is constantly updated, often many times a second.
Key components of an order book
Every order book has the same key components:
- Bids (buy orders). Each bid shows the maximum price a buyer will pay and how much they want. The highest bid, or best bid, sits at the top of the bid side.
- Asks (sell orders). Each ask shows the minimum price a seller will accept. The lowest ask sits at the top of the ask side.
- Size. The quantity waiting at each price level, often with a running total.
- Recent trades. Many exchanges show a list of the latest trades next to the book.
The best bid and the lowest ask together are called the top of the book.
Bid and ask
The bid and ask are the two prices that matter most. The bid price is what you get if you sell immediately; the ask is what you pay if you buy immediately. When a buyer’s bid meets a seller’s ask at the same price, a trade happens and both orders leave the book.
Price levels and the bid ask spread
Orders at the same price are grouped into one price level. The gap between the highest bid and the lowest ask is the bid ask spread. A small spread means a liquid market where you can trade without losing much; a wide spread means a hidden cost every time you buy and sell.
Example: reading a BTC/EUR order book
Here is a simplified order book with illustrative numbers:
| Side | Price | Size (BTC) |
|---|---|---|
| Ask | €60,060 | 0.30 |
| Ask | €60,040 | 0.15 |
| Ask (lowest) | €60,020 | 0.05 |
| Bid (highest) | €60,000 | 0.10 |
| Bid | €59,980 | 0.40 |
| Bid | €59,950 | 1.20 |
The spread is €60,020 − €60,000 = €20, or about 0.03% of the price. Buying and immediately selling would cost you that spread plus fees.
How order books work
Most exchanges match orders by price-time priority. The best price is filled first: the highest bid and the lowest ask. Within the same price level, the order placed first is filled first, which is called time priority. Filled orders disappear from the book; cancelled orders disappear too, which changes the displayed liquidity instantly.
Market orders
Market orders never sit in the book. They are executed immediately against the best orders on the other side. In the example above, a market buy of 0.1 BTC takes all 0.05 BTC at €60,020 (€3,001) and 0.05 BTC at €60,040 (€3,002). You pay €6,003 in total, an average of €60,030, which is €10 per bitcoin above the lowest ask. That difference is slippage, and it grows when the order book is thin.
Limit orders that don’t fill straight away are what fill the order book. On crypto exchanges they usually pay the lower maker fee, while market orders pay the taker fee; see maker and taker fees.
Visual representation: the depth chart
A depth chart is a visual representation of the order book. Price runs along the horizontal axis and the cumulative size along the vertical axis. Bids form a rising green area on the left, asks a red area on the right, and the gap in the middle is the spread.
A steep wall shows a large amount of orders at one price. Buy walls can look like support and sell walls like resistance, but they are not promises: they can be cancelled in a second.
Order books and market liquidity
Market depth tells you how much you can buy or sell before the price moves. A liquid market has many orders close to the current price, a smaller spread and little slippage. For a small token, a €1,000 market order can move the price by several percent; for bitcoin on a large exchange, it usually won’t.
Displayed liquidity is only a snapshot. Some orders are hidden, others are pulled the moment the market moves, and every exchange has its own order book, so depth on one venue says little about another. See liquidity for more.
How traders use order books
Traders use order book analysis to make more informed trading decisions:
- Judging costs. Checking the spread and depth before a large trade shows what it will really cost.
- Spotting support and resistance. Clusters of large buy orders can act as potential support, and clusters of sell orders as resistance levels, at least for a while.
- Reading market sentiment. A book heavy with bids can hint at buying pressure, but it is only one piece of the picture.
No single indicator gives a complete picture of supply and demand dynamics. Combine the order book with volume and price movement, and never rely on it alone.
Order books for stocks and crypto in the EU
On EU stock exchanges such as Euronext and Xetra, an order book runs during trading hours, but many brokers don’t show it in full. Some route your order to a market maker or their own trading venue instead, so check your broker’s order execution policy.
Under MiCA, crypto trading platforms licensed in the EU must publish their bid and ask prices and the depth of trading interest continuously during trading hours, plus the price, volume and time of executed trades. They also may not trade on their own account on the platform they operate, and MiCA’s market abuse rules ban fake orders that give misleading signals.
Key takeaways
Bids are what buyers offer, asks are what sellers want, and the spread between them is a trading cost you pay on every round trip. The order book changes constantly, so use it to judge liquidity and costs, not to predict where the price goes next. Any asset can fall in value, and crypto-assets can lose all of it.
Related terms
Questions people ask
Do I buy at the bid or the ask?
With a market order you buy at the ask, the lowest price a seller accepts, and sell at the bid, the highest price a buyer pays. With a limit order you can place your own bid or ask and wait for the market to come to you.
What happens if the bid is higher than the ask?
In a working order book that can't last: as soon as a bid is equal to or higher than the lowest ask, the two orders match and a trade happens. The order book only ever shows bids below asks.
Do market orders appear in the order book?
No. Market orders are filled immediately against orders already in the book, so they never wait there. Only limit orders that haven't been filled yet appear in the order book.
Can an order book predict prices?
Not reliably. It shows current supply and demand, but orders can be cancelled in seconds, and large walls are sometimes placed only to mislead. Use it to judge liquidity and costs, not to forecast prices.
How do I see an order book?
On most crypto exchanges, open the advanced or pro trading view for a pair such as BTC/EUR. Many stock brokers don't show a full order book, but some offer level 2 market data, sometimes for a fee.