Order Book & Bid-Ask Spread
A partial and rapidly changing view of displayed liquidity—not a complete map of supply and demand or a price forecast.
An order book displays selected visible bids and offers for a venue or consolidated feed at a point in time. It may omit hidden, midpoint, conditional, internalized, off-exchange, or other liquidity, and displayed orders can be modified, cancelled, or executed before another trader acts.
Frequently Asked Questions
Does a thick order book create reliable support or resistance?
No. Displayed size can disappear, move, or be consumed, and hidden liquidity may not be visible. Depth is descriptive, not a guarantee of future execution or price behavior.
Is the bid-ask spread the full cost of trading?
No. Realized cost can also include market impact, slippage, fees, rebates, delay, adverse selection, taxes, financing, and opportunity cost.
Can an order book predict short-term prices?
Not reliably. Imbalances can change quickly and may be caused by cancellations, market making, hedging, routing, or strategic behavior. Predictive relationships are unstable and execution-sensitive.
Can displayed orders be misleading?
Yes. Orders can be cancelled or modified, and manipulative practices such as spoofing are prohibited in many jurisdictions. A visible order is not a commitment that another trader can execute against it.