Limit Order Book

A Limit Order Book is a real-time electronic record of buy and sell orders for a specific security, like a stock. Traders submit limit orders specifying the maximum price they’re willing to pay (buy) or the minimum price they’ll accept (sell). The book displays these orders arranged by price level, with the highest buy prices and lowest sell prices closest together. When matching prices meet, a transaction occurs. This system provides transparency about market activity, showing supply and demand, helping traders make informed decisions based on current market depth.