Order book
The order book is the live list of buy and sell orders for a at various prices, maintained by an exchange or trading venue and updated continuously as new orders arrive, get filled, or get canceled. Buy orders, called bids, sit on one side ranked from the highest price down, and sell orders, called offers or asks, sit on the other side ranked from the lowest price up. The highest bid and lowest ask make up the top of the book, which is what generates the current quoted price for the .
A trade happens whenever a new order matches an existing one already resting in the book, typically when someone is willing to buy at the current lowest ask or sell at the current highest bid, rather than waiting at a better price that has not been reached yet. Everything below the very top of the book represents unfilled buying and selling interest waiting at prices away from the current market, and viewing multiple layers of that depth is what actually show.
The order book gives a real time picture of supply and demand at each price level for a , which is different from simply knowing the last traded price. A can have a stable last price while its order book shows very thin size just behind the top level, meaning the price could move quickly if a larger order comes in and works through those thinner levels. Traders who pay close attention to order book dynamics are often looking for exactly this kind of imbalance between visible buying and selling pressure.