What is an Orderbook?
All types of exchanges, whether it be a stock, bond or cryptocurrency exchange need a way of displaying all of the outstanding orders for each instrument being traded. This is done using an Orderbook. An Orderbook is a digital, real-time, constantly updating list of all the outstanding buy and sell orders for an instrument, organised by price.
Reading the Orderbook
The Orderbook is organised in rows and split into two halves. Each row contains price levels and the number of contracts (Size) for each corresponding price. The Total column shows a cumulative count of contracts from the middle of the Orderbook to each price level.
The top half of the Orderbook contains sell orders (in red) often referred to as “Asks”, the bottom half contains all buy orders (in green) often referred to as “Bids”. All orders displayed in the Orderbook are limit orders.
As seen in the image below, the best bid is the highest price someone is willing to pay for XBTUSD, which is 23788.5 - this is shown at the top of the bids section (in green). The best ask is the lowest price someone is willing to sell XBTUSD at, in this case, 23789.0. This can be seen at the bottom of the asks section of the Orderbook (in red). The difference between the best bid and ask is known as the “spread”.
Understanding the middle of the Orderbook
Between the buys and sells in the Orderbook, there is also additional information that is useful to traders.
The top value shows the Last Price of the instrument. This is the price traders will see on the trading chart.
The second value with the globe icon is the Index Price. For XBTUSD, the index is the .BXBT price.
- The third value is the Mark Price of the instrument.
The five lights beside Mark Price show your position in the deleveraging queue
How to customise your Orderbook
You can customise the Orderbook based on your needs and preferences. Click the Settings icon in the top right corner of the Orderbook. Here you have options to change the number of columns, the grouping and whether you want alerts on liquidations.
Switching to a two-column view puts bids and asks side by side rather than on top of each other. In this view, the last price, index price, mark price and deleverage queue are all shown on the top row.
Adjusting the Orderbook grouping changes the size of the intervals between prices for a more clear view of where orders are currently placed.