A limit order book is a record of all unexecuted buy and sell limit orders for a specific security in the market. A limit order is an instruction to buy or sell a security at a specified price or better.
The limit order book is divided into two sides:
- the buy side, which lists all the bids (buy orders), and
- the sell side, which contains all the offers (sell orders).
- Market participants who want to purchase shares place bids, while those looking to sell shares place offers. The order book shows the desired trading prices of market participants, as well as the volume (quantity of shares) available at those prices.
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