Friday, May 24, 2024

Top of Book

Top of Book represents the highest bid and lowest asking price at that time.

They are interesting because they indicate the prevailing market and the bid and ask prices required to fulfill an order.

The best selling price is the lowest selling price, and the best bid is the highest bid.

If the ask price is lower than the bid price, it is considered a “cross”.

This will be a “Cross Market” and will be resolved soon.

So the bid is almost always cheaper than the asking price

“Top” in the sense of “top” is a ranking (in order of “best”, bid is different from ask) and does not mean strictly visual positioning on a page or screen.

Think of a “book” as a model, excellent an abstract collection of bid and ask order data.

When people talk about “maximum price” they are talking about the best bid (higher is better) and the best ask (lower is better).

The visual representation above is just one possible way of presenting a tip-of-the-iceberg view of the best orders in the “book”.

The advantage of this particular visual representation is that one can see the ask and bid prices converging towards the centre.

The spread is visible as the difference between the two middle elements – the lowest line in the blue “Ask” area and the highest line in the green “Bid” area.

Top of Book

If you want to learn more foreign exchange trading knowledge, please click: Trading Education.

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