DeutschWhat is Market Depth?
Market depth refers to the market’s ability to handle large orders without significantly affecting the security’s price. It reflects the volume of buy and sell orders at various price levels. A higher market depth indicates greater liquidity and less volatility.
Explanation:
It shows the number of open buy and sell orders for a security at different price levels. Greater market depth indicates more liquidity and less volatility.
Practical Example of Market Depth:
A stock with substantial buy and sell orders at various price levels is considered to have good market depth, meaning it can handle larger transactions without significant price changes.
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