Glossary · Trading & markets
What is Order book?
The list of all open buy and sell orders on an exchange, organized by price. The bid side is buyers willing to pay X; the ask side is sellers willing to accept Y. The gap between them is the spread.
Last updated April 30, 2026
How it works
A typical CEX order book at any moment:
| Bid (buy) | Ask (sell) |
|---|---|
| 0.5 BTC @ $74,920 | 0.3 BTC @ $74,930 |
| 1.0 BTC @ $74,910 | 0.8 BTC @ $74,940 |
| 0.4 BTC @ $74,900 | 2.1 BTC @ $74,950 |
The "best bid" is $74,920 (highest someone wants to pay); the "best ask" is $74,930 (lowest someone wants to accept). The gap, $10, is the bid-ask spread. A market buy lifts the asks; a market sell hits the bids.
Orders sit in the book until they're filled, canceled, or expire. Big orders ("blocks") that don't want to move the price are usually broken into smaller pieces and executed over time, sometimes through "iceberg" orders that only show a fraction of the actual size.
Example
You place a market buy for 1 BTC against the book above. You'd take the entire $74,930 ask (0.3 BTC), the next $74,940 ask (0.7 BTC of the 0.8 available), and your average fill price would be:
(0.3 × 74,930 + 0.7 × 74,940) / 1.0 = $74,937
That's $7 of slippage from the best ask, on top of the taker fee. On a deeper book the same trade might fill entirely at the best ask. Order book depth is what separates a "deep" liquid market from a thin one.
Why it matters
Reading the book — sometimes called "watching the tape" — is part of every active trader's discipline:
- Asymmetric depth signals direction. If $5M of bids are stacked at the next price level but only $200k of asks above, the path of least resistance is up.
- Walls are large orders at a specific price that act as resistance/support. They sometimes get pulled the moment price approaches.
- Spoofing — placing big fake orders you intend to cancel — is illegal on regulated venues but happens in unregulated crypto. Don't trust huge walls without other confirmation.
- DEX vs CEX: centralized exchanges have order books; most DEXs use AMM pools instead, which behave differently (no walls, deterministic slippage curve).
For most retail traders, order book mechanics matter most for understanding why your large market order didn't fill where the chart said it should.