Definition
An order book is a real-time electronic list of buy and sell orders for a specific asset on an exchange. It displays the prices and quantities that traders are willing to buy or sell at. The order book helps match buyers and sellers while providing insight into market demand and supply. Traders often analyze order books to identify support, resistance, and potential market movements.
Simple Explanation
An order book is a list of all active buy and sell orders on an exchange.
Example
A trader views the Bitcoin order book to see where large buy and sell orders are placed.
Why It Matters
Order books improve market transparency and help traders understand supply and demand.
Frequently Asked Questions
What is an order book?
It is a list of active buy and sell orders.
Who uses order books?
Exchanges and traders use them to execute trades.
Can order books predict price movement?
They may provide useful market insights but do not guarantee outcomes.