Market Depth

Market depth shows how much buy and sell liquidity is available at different price levels around the current market price.

Depth information is normally represented by the order book. Buy orders form the bid side, while sell orders form the ask side.

Why market depth matters

A deep market can absorb relatively large orders with less price impact. In a shallow market, even a moderate order can consume several price levels and produce significant slippage.

Trading volume alone does not fully describe liquidity. Two markets can have similar daily volume but very different order-book depth.

Visualization

Exchanges often display market depth as a table or depth chart. It shows cumulative order volume on both sides of the current price and helps traders estimate the potential price impact of larger orders.