orderdjup

Orderdjup, commonly translated as depth of market, is a concept used in financial markets to describe the liquidity of an asset at different price levels within the order book. It represents the quantity of buy orders (bids) and sell orders (asks) available at each price point and the cumulative volume that would need to be executed to move the price to a new level. A deeper orderdjup indicates more liquidity and typically reduces the price impact of large trades, while a shallow depth suggests that even modest orders can cause noticeable price shifts.

Orderdjup is usually observed through two related data views. The top of the book shows the best bid and ask prices, known as Level 1 data, while Level 2 data reveals additional price levels beyond the best quotes, offering insight into the broader liquidity distribution. Market participants may visualize orderdjup with depth charts or by examining the live order book supplied by exchanges or data providers.

In practical use, orderdjup informs decisions about execution strategies, timing, and order sizing. Traders and institutions assess liquidity to estimate potential slippage, route orders efficiently, and manage risk when handling large positions or rapid intraday trading. It also serves as an indicator of market resilience; a robust depth can absorb trades with smaller price moves, whereas limited depth can signal vulnerability to volatility.

Limitations include the presence of hidden orders, latency between data feeds and executions, and trading behavior that can distort perceived depth, such as spoofing or rapid order placement and cancellation. Consequently, orderdjup provides a snapshot of liquidity rather than a guaranteed forecast of price movement.