Glossary · Defined term
Order book
An order book is the live list of buy and sell orders for a security, showing price and size at each level of supply and demand.
Last updated Oct 2, 2026
What it means
An order book is the live list of buy and sell orders for a security, showing the price and size of each order waiting to trade. The bids stack up on one side and the asks on the other, with the best bid and best ask at the top forming the current quote. Detailed order book data, often called Level 2, shows depth beyond the top of the book.
The book is a real-time map of supply and demand. A thick book with large orders clustered near the current price means the stock can absorb big trades without moving much. A thin book with gaps between price levels means even modest orders can push the price sharply, which is why thin books and volatile stocks go together.
Traders watch the book for signs of intent: large bids appearing below the price suggest support, while a wall of asks above suggests resistance. But the book can deceive, since orders can be placed and cancelled in milliseconds to create false impressions. Dark pools exist precisely to keep large orders out of this public display.
An example
For illustration, an order book shows only 100 shares offered between the current price and $55, then a 50,000-share sell order at $56. A large market buy would chew through the thin levels and fill most of its shares up at $56, gapping the price.