Market depth

Market depth refers to the market's ability to sustain large orders without significantly impacting the price of a stock or asset. It shows the number of buy and sell orders at different price levels. A market with good depth indicates that there are enough buyers and sellers, allowing for smooth transactions. Higher market depth means that large purchases or sales can occur with minimal price change, reflecting stability and liquidity. Conversely, low market depth may lead to price swings with big trades, making it riskier for traders.