How to read an order book
- Order book basics. Practically every exchange in the world, trading crypto or other assets, will have an order book for each of the markets available on the exchange.
- Matchmaking. ...
- Interpreting the spread, market depth and liquidity. ...
- The two prices in the middle are last traded price (1) and mark price (2)
- Price: The prices for sell limit orders are in red (3), and the buy limit orders are in green (4)
- Quantity: Order quantity in USD terms at each order price.
What is a stock’s order book?
Nov 16, 2017 · Market depth chart / Order Book Depth. The market depth chart displays these orders in an easily understandable manner. It puts all buy and sell orders into a chart and stacks them onto each other ...
How to read an order book?
There are two sides of the Order Book. The green buy side (Bid) and the red sell side (Ask). Both display the prices, amounts, and totals. The larger the totals, the larger the green or red colored depth to that area of the order book. The Bid Side (Buyers) The Bid side of the order book displays all open buy orders among users of the exchange below the last traded price.
How does the order book for a stock show liquidity?
An entry in the order book contains the price (ask or bid), the size of the order and the total amount to get executed. The SUM column is a running total of the combined orders at this price level. Order books are organized in such a way that the highest bid and lowest ask are always on the top of the order book, as they are the first to get consumed.
What is the purpose of the order book?
Nov 09, 2018 · An order book is a list, typically electronic, of buy (bid) and sell (offer) orders, including the number of shares to be bought or sold. The order book is organized by price level.
What does red mean in order book?
sell ordersThe red boxes indicate sell orders and the green boxes indicate buy orders. For both sides of the order book (bid and ask / buy and sell) the annotated numbers indicate the following: The price level.Apr 22, 2013
What is a Level 2 order book?
Level II is essentially the order book for Nasdaq stocks. When orders are placed, they are placed through many different market makers and other market participants. Level II will show you a ranked list of the best bid and ask prices from each of these participants, giving you detailed insight into the price action.
What is Level 3 in stock trading?
Understanding Level III Quotes A level III quote allows a person to enter into best execution trades as prices are being updated in real-time. All publicly traded equities have a bid price and an ask price when they are bought and sold. The bid is the highest price an investor is willing to purchase a stock.
What is order book level 1?
Level 1 Quotes This is the bid and ask where the highest bid and the lowest ask available are advertised to you on your screen. The difference between the bid and ask is called the bid-ask spread. This is the limit to order book data in level 1.Jul 30, 2019
How to make a referral
Earn 5% on your referral’s fees when they sign up with your promo code and start trading. To share your referral code with other traders, navigate...
Deposit Bonus FAQ
Do I have to be a new customer to receive a bonus? All Beaxy Exchange account holders are eligible to apply to receive a deposit bonus. Barring any...
Market Impact
Q: What is market impact and why should I avoid it? A: Market impact is the price movement imposed by an executed trade (upward when buying and dow...
Fund Your Beaxy Account With a Wire Transfer
You can fund your Beaxy Exchange account with dozens of cryptocurrencies, credit and debit cards, or by sending a wire transfer from your bank acco...
Sending Wire Transfers – Best Practices
With the addition of fiat transactions through PrimeTrust we have opened a very strong bridge between legacy finance and cryptocurrency for Beaxy u...
Who operates the Beaxy Exchange?
The Beaxy Exchange (beaxy.com) is operated by Windy Inc in the United States and around the world. Windy Inc is registered with the U.S. Department...
Maintenance Policy
Beaxy utilizes a modular and layered architecture. We are making upgrades to components multiple times per week, often with zero downtime for our u...
Purchasing crypto through Simplex
Beaxy has partnered with Simplex to allow you to purchase BTC and ETH directly through the exchange. These purchases are extremely quick and deposi...
Preventing Phishing
Phishing is the commonly used term that refers to multiple forms of social engineering. These attacks can take the form of phone calls, emails, soc...
How do I create a new wallet?
We have provided a convenient video to help you with this process. Please feel free to watch it or follow the written instructions in the article b...
What is an order book?
An order book is a real-time list an exchange uses to record all oustanding passive orders placed on a marketplace. An order book represents the interests of buyers and sellers, offering a window into the supply and demand dynamics of a given market. To become comfortable reading order books, it is essential to understand the fundementals ...
What is market order?
Active orders, or market orders, are requests to buy or sell at the best-available price in the current market. In a highly liquid market, market orders are executed almost instantly. Market orders are not shown in the order book, instead they are shown in the trade history column to indicate market activity.
What is the buy side?
The buy side represents all open buy orders. Once bids are matched with an appropriate ask, the trade can be executed. When there is an abundance of buy orders (demand) at a specific price level, something known as a buy wall is formed.
What is a passive order?
Passive orders, like the limit and stop order, are orders to buy or sell at a specified price or better. Passive orders are placed in the exchange order book and remain there until they are cancelled (by the trader), or consumed by the exchange. They are considered »passive« trades because they do not move the market price.
What is market order?
A market order is an order that is placed to buy or sell a financial instrument at the current going rate of the market. For example, let's say that the current market price for a share of Apple (AAPL) is $300, if you place a buy order at the current market price then the trade will execute and buy the share for $300.
What is trailing stop?
With a trailing stop, the price that your share (s) are sold at is determined by a specified amount below the market price, usually a percentage. If the price increases, the stop follows the market price by this specified amount. But if the price drops, this lower specified amount will stay the same. This mechanism allows one to lock in higher-profits and limit the amount of loss.
What is an order book?
An order book is a record of active buy and sell orders in a single market. Every market on every exchange has its own order book composed of unique buy and sell orders. Many of the orders you can see in the order book reflect that trader’s honest intentions.
What are the two sides of an order book?
Orders in an order book are separated into two “sides”: bids and asks (buy orders and sell orders, respectively). Bids are the price a trader is willing to pay and Asks (a.k.a. “Offers”) are the price a trader is willing to sell at.
What is a depth chart?
The market depth chart is a visualization of the order book. Because the depth chart’s data is derived from the order book, it indicates the same information. Traders may favor the depth chart over the order book when looking for the bid-ask spread or support and resistance levels.
What is the meaning of "liquidity"?
Liquidity refers to the ease of buying and selling an asset without affecting its market price. Highly liquid markets have a high number of buyers and sellers with a high volume of the asset committed to the order book. In highly liquid markets, large orders are less likely to change the price.
What is support resistance?
“Support” and “resistance” refer to price levels with a significant amount of buying or selling interest, respectively. One method of determining support and resistance is to draw lines to historically significant levels on the price chart (check out our Drawing on Charts guide to learn how to do it).
Stock Quote Information
Using the example above on the left-hand side, assume we get a stock quote for MEOW Corp. and we see a bid of $13.62 (x3,000), and an ask of $13.68 (x500).
Depth and Liquidity
Now consider the figure above on the right-hand side. This shows MEOW's order book, also known as a Level 2 quote .
Other Considerations
If these orders are not carried out during the trading day, then they may be carried over into the next trading day provided that they are not day orders. If these bid and ask orders are day orders, then they will be canceled at the end of the trading day if they are not filled.
