What is an order book?

An order book is an electronic register of orders to buy and sell particular securities at various price levels. The order book is updated in real time and is an important indicator of market depth. The order book helps traders assess the state of the market at any time.

Where have you heard the order book?

As an investor, you or a financial advisor can use the order book to determine the level of demand for a particular security and its investor class-private or institutional.

What you need to know about the order book...

The order book has significantly improved the transparency of the financial market. The buy and sell orders listed in the securities order book are sorted by price. The order book also contains the price level. Purchase Price and the selling price,

Any significant imbalance in buyer or seller orders may be displayed, providing a clear indication of the likely price trend of the security.

However, buyers and sellers sometimes trade anonymously, so you cannot know whether they are individuals or institutions, and the order book does not list orders in the so-called "dark pool.