What is an order book? How to read it, and what the spread is
Short answer
An order book lists every unfilled buy and sell order for a trading pair, sorted by price: sell orders from the lowest up, buy orders from the highest down. The gap between the lowest sell price and the highest buy price is the spread. The smaller it is, the closer a market order fills to the price you see.
- If your limit order doesn't fill right away, it waits on the order book: that's a maker order.
- A market order fills against orders already on the book: that's a taker order.
In one line
Every open buy and sell order for a trading pair, sorted by price.
An example
The BTC/USDT order book might look like this:
- Sell orders: 60,020 (0.5 BTC), 60,010 (0.3 BTC)
- Buy orders: 60,000 (0.8 BTC), 59,990 (1.2 BTC)
A market buy takes the 60,010 sell order first. A limit buy at 59,950 joins the buy side and waits for the price to come down.
Fees
Adding an order to the book and waiting for someone to fill it makes you a maker. Filling against an order already on the book makes you a taker. Standard spot fees at OKX are 0.08% for makers and 0.1% for takers; at Binance, it’s 0.1% for both.
Related
FAQ
Do beginners need to read the order book?
Not for a small buy on a busy pair. If you're buying a coin that doesn't trade much, or a large amount, take a look first: few orders and a wide spread mean more slippage on a market order.
What is the spread?
The gap between the lowest sell price and the highest buy price. For example, if the lowest sell order is 60,010 and the highest buy order is 60,000, the spread is 10 USDT.
Can other people see my order on the book?
They can see the price and amount, but not who placed it. Once your order fills or you cancel it, it disappears from the book.