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What is an order book?
An order book is the live list of offers to buy (bids) and offers to sell (asks) for an asset on a trading venue, sorted by price. Each line shows a price and how much someone is willing to trade there.
What it means for you
The book shows how much you could sell before the price drops. If only small orders sit near the top, a larger sale eats through several price levels and the average you receive falls. A thin book on a quiet coin is the usual reason a sale comes back short of the quoted price.
How it works
Each limit order, an instruction to trade only at a set price or better, waits in the book until something matches it. Bids are stacked from highest down, asks from lowest up; the gap between the top bid and top ask is the spread. A market order trades against the waiting orders on the other side, starting at the top. If the top level is smaller than the order, the rest fills at the next level, and the next, so a large order can execute at several prices. The quantity waiting at each level, often called depth, decides how far a given sale moves the price.
An example
Say the book shows buyers for 2 coins at 100 dollars, 3 at 98 and 5 at 95. A market sell of 10 coins fills 2 at 100, 3 at 98 and 5 at 95: 969 dollars in total, an average of 96.90, not the 100 on screen.
Sources: CFTC: Glossary, SEC Investor Bulletin: Trading Basics, FINRA: Understanding Market Liquidity and Your Investments · checked 4 October 2026
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