Investor education: reading the order book
13 May 2025
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The order book is one of the stock exchange's most important tools, letting you see every buy and sell order in real time. For new investors, learning to read it is essential for understanding market depth and price formation.
Key terms
- Bid — the highest price a buyer is willing to pay
- Ask — the lowest price a seller is willing to accept
- Spread — the difference between Ask and Bid; a measure of liquidity
- Depth — the total volume of buy and sell orders across all price levels
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Example: order book snapshot
| Bid size | Price (GEL) | Ask size |
|---|---|---|
| 500 | 12.40 | — |
| 300 | 12.38 | — |
| — | 12.45 | 200 |
| — | 12.50 | 400 |
Spread = 12.45 − 12.40 = 0.05 GEL. A narrow spread signals high liquidity and a healthy market.
Practical tips
When analysing an order book, pay attention to large orders — known as "walls". They often indicate temporary price barriers. A deep bid side signals strong buying support, while a thick ask side suggests selling pressure.
Do not rely on the order book alone: the market is dynamic and orders change within seconds. Use it alongside other analytical tools for a fuller picture.
