Before you place a trade, the order book tells you everything you need to know about a market. It shows all active buy and sell orders, the prices they are sitting at, where liquidity exists, and how a larger order might execute.
Key terms
Term | Definition |
Bid | The highest price a buyer is willing to pay |
Ask | The lowest price a seller is willing to accept |
Spread | The difference between the best bid and the best ask. A wider spread means it costs more to enter and exit a position |
The order book is visible below the order ticket on each market page. Click Order Book to expand it. It shows Price, Shares, and Total for each available price level on both sides of the market.
How liquidity affects your trade
Liquidity refers to how many contracts are available at different price levels. It directly affects how your order executes.
Higher liquidity | Lower liquidity |
Faster fills | Slower fills |
Tighter spreads | Wider spreads |
Less price movement on entry/exit | Larger orders may fill across multiple price levels |
Slippage
When a larger order fills across multiple price levels, your average execution price may differ from the price you saw when you placed the order. This is called slippage and is a normal part of trading in any order book market.
Example: YES is showing at 68¢. You place a $400 market order. There are only $150 worth of contracts at 68¢, then another $250 at 70¢. Your order fills $150 at 68¢ and $250 at 70¢. Your average fill price is approximately 69.3¢ — slightly worse than the displayed price.
How to reduce slippage
Check the order book before placing larger orders to understand available depth
Use a limit order to cap the price you are willing to pay
Be aware that newer or less popular markets tend to have less liquidity