Orders and trading · updated October 21, 2026
What is the order book and how do you read it
The order book shows, for a stock, all the limit orders waiting to fill: buyers and their prices on the left, sellers on the right. It tells you how much you can buy or sell without moving the price.
How it works
Buy orders are ranked from the highest price down, sell orders from the lowest price up. The top row on each side gives the bid and the ask; the gap between them is the spread. When a market order comes in, it eats through the rows one by one. Many brokers show the top 5 levels for free.
Worked example
On the sell side there are 300 shares at $10.00, 500 at $10.05 and 1,000 at $10.10.
For 800 shares you pay on average (300 × 10.00 + 500 × 10.05) ÷ 800 ≈ $10.03.
Worth knowing
A "deep" book, with many shares at each level, means good liquidity. A thin one means an average-sized order can move the price.
When the order book can fool you
Orders that vanish: some large orders are placed and pulled quickly, to give a false sense of demand or supply. Hidden orders: on some exchanges, large orders can be shown only in part (iceberg orders).
Related terms
Learn it in the Academy
Questions about the order book
What is market depth?
How many shares are available to buy and sell at prices close to the current one. The deeper the market, the larger the amounts you can trade without moving the price.
These explanations are for information only. They are not a recommendation to buy or sell.
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