The market's ability to sustain relatively large market orders without impacting the price of the security.

Market Depth

This considers the overall level and breadth of open orders and usually refers to trading within an individual security. For example, if the market for a stock is "deep", there will be a sufficient volume of pending orders on both the bid and ask side, preventing a large order from significantly moving the price. Market depth is closely related to liquidity and volume within a security, but does not mean that every stock showing a high volume of trades has good market depth.

On any given day there may be an imbalance of orders large enough to create high volatilityeven for stocks with the highest daily volumes.

The decimalization of ticks on the major U. Dictionary Term Of The Day.

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What is 'Market Depth' The market's ability to sustain relatively large market orders without impacting the price of the security. Depth Imbalance of Orders Order Book Indicative Match Price Average Daily Trading Volume Contingency Order Breadth Indicator Closing Offset CO Order Down Volume. Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator.

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