Order books, order types & slippage
The price on screen is a promise for the first tiny buyer only.
Builder · 9 min · Updated 2026-11-08
💡 The vegetable market
Five stalls sell tomatoes at ₹40, ₹41, ₹43, ₹46 and ₹50 per kilo, each with 10 kilos. Buy 1 kilo and you pay ₹40. Buy 40 kilos and you clear four stalls — paying an average of ₹42.50. The "price" was ₹40, but your price was worse. That gap is slippage.
Reading an order book
- Bids — buyers' prices (highest first).
- Asks — sellers' prices (lowest first).
- Spread — the gap between best ask and best bid. Tight spreads usually mean liquid markets.
- Depth — how much volume sits at each level.
Order types
| Order | What it does | Trade-off |
|---|---|---|
| Market | Fills immediately at the best available prices | Certain fill, uncertain price |
| Limit | Fills only at your price or better | Certain price, uncertain fill |
| Stop-loss | Becomes a market (or limit) order when a trigger price hits | Can fill far below trigger in fast markets |
| Take-profit | Closes a position at a target | May never trigger |
Fees: maker vs taker
Orders that add liquidity (resting limit orders) often pay lower "maker" fees; orders that remove liquidity pay "taker" fees. Over many trades, fees compound into a significant drag.
Slippage in practice
Slippage grows with order size relative to depth, during volatility and on thinly traded coins. On DEXs you set a slippage tolerance — set it too high and bots can "sandwich" your trade.
🧮 Practical example: buying $50,000 of a small token
Key takeaways
- Spread + depth = liquidity.
- Market = fast fill, limit = price control.
- Slippage grows with size and volatility.
- Stops are not guarantees.
Education only — not financial advice.