Reading an Order Book
Read bids, asks, spread and depth to judge how much a trade will cost before you place it.
The order book is the list of every resting buy and sell order for a market. It tells you what price you will actually get — which is often not the price on the chart.
Bids, asks and the spread
- Bids (green) are buy orders waiting to be filled, highest price at the top.
- Asks (red) are sell orders waiting to be filled, lowest price at the top.
- The spread is the gap between the best ask and the best bid. A market buy pays the ask; a market sell receives the bid.
| Best bid | $99.90 for 5 units |
|---|---|
| Best ask | $100.10 for 3 units |
| Next asks | $100.40 for 4 units, $101.00 for 10 units |
| Market buy 7 units | 3 × 100.10 + 4 × 100.40 = $702.90 → avg $100.41 |
Your 7-unit buy filled 0.3% above the best ask. That extra cost is slippage, and it grows with order size and thinner books.
Depth
Depth is how much size sits near the current price. Deep books (BTC, ETH) absorb large orders with little slippage. Shallow books (small coins) can move several percent on a modest market order. Before a large trade, look at how much size sits within 0.5–1% of the price.
Reading the tape
The trades list next to the book shows executed trades: green when a buyer took an ask, red when a seller hit a bid. A burst of large green trades shows aggressive buying; a big bid that keeps getting refilled can act as short-term support.
Key takeaways
- Market buys pay the ask, market sells receive the bid; the spread is a cost of trading.
- Large market orders walk the book and pay slippage.
- Check depth near the price before trading size, especially on small coins.