GlossaryIntermediate
Market Depth
How much buy and sell order volume exists at prices near the current market price.
Market depth describes how much buy and sell order volume is available at price levels near the current market price, generally shown on an order book.
Deeper markets can generally absorb larger trades with less price impact than shallower ones, which matters directly for estimating potential slippage on a trade.
Examples
- A market with strong depth can absorb a large order without moving the price significantly.
- Checking market depth before a large trade can help estimate its likely price impact.