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The live, ranked list of all the buy and sell orders waiting to be filled for a stock.
Why It Matters
The order book is where supply and demand meet. On one side are buyers' bids and how many shares each wants; on the other are sellers' asks. A market order fills against the best prices in the book, climbing to the next level if it needs more shares. A deep book - lots of orders at each price - means your order barely moves the price; a thin book means even a small order can jump several levels. You usually only see the top of the book, but the whole thing determines your fill.
Key Points
- Buyers post bids, sellers post asks, ranked by price
- A deep book absorbs large orders with little price movement
- A thin book is why market orders on small stocks can slip
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Market Orders Explained
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Common Questions
The live, ranked list of all the buy and sell orders waiting to be filled for a stock. The order book is where supply and demand meet. On one side are buyers' bids and how many shares each wants; on the other are sellers' asks.
The order book is where supply and demand meet. On one side are buyers' bids and how many shares each wants; on the other are sellers' asks. A market order fills against the best prices in the book, climbing to the next level if it needs more shares. A deep book - lots of orders at each price - means your order barely moves the price; a thin book means even a small order can jump several levels. You usually only see the top of the book, but the whole thing determines your fill.
Buyers post bids, sellers post asks, ranked by price
A deep book absorbs large orders with little price movement
A thin book is why market orders on small stocks can slip