Order book

How it is used

Traders read the order book to judge depth and liquidity: a thin or deep order book, bids and asks, the spread between them. Centralized exchanges use order books; most decentralized exchanges use liquidity pools instead.

Example sentences

1. The order book is so thin that a single large sell order moved the price by 5 percent.

2. Our matching engine updates the order book in under a millisecond.

Common collocations

• deep order book
• thin order book
• order book depth
• place an order
• bids and asks

Related terms

• trading pairTwo assets that can be traded directly against each other on an exchange, such as ETH/BTC. The price shows how much of the second asset you need for one unit of the first.
• liquidityHow easily an asset can be bought or sold quickly without moving its price much. In DeFi, it also means the funds that users deposit into pools so that others can trade.
• slippageThe difference between the price you expect when you place a trade and the price at which it is actually completed, usually caused by low liquidity or fast price moves.
• centralized exchangeA crypto exchange run by a company that holds customers' funds, matches buy and sell orders on its own system and usually checks users' identities. Often shortened to CEX.
• spot tradingBuying and selling crypto at the current market price for immediate settlement, so that the buyer really owns the coins, unlike trading futures or other derivatives.

More terms: Exchanges & Trading

• exchange
• market cap
• volatility
• fiat
• leverage
• liquidation