How does a depth chart work? (2024)

Improve your understanding of the market with depth charts

How does a depth chart work? (1)

Written by Daniel H
Updated over a week ago

Depth refers to the ability of a market for a specific asset to sustain large orders of that asset without the asset’s price moving significantly. The more open limit orders there are on both sides of an orderbook for an asset, the more depth that book has.

A depth chart is a graphical representation of buy and sell orders for a specific asset at various prices. A depth chart illustrates both sides of supply and demand to show how much of an asset you can sell at a particular price point.

A depth chart is split in the middle, which is the price of the asset during the last trade. It is also organized across the bottom by price.

How does a depth chart work? (2)

On the left (green) side you have the lowest buy order (price) that buyers hope the asset will become so they can buy it affordably.

On the right (red) side you have the highest sell order (price) that sellers hope the asset will become so they can sell it for a large profit.

Overlapping Values are Arbitrage

Notice the overlap in the green and red lines. In this example, there are buyers willing to buy at a price up to $5,996/BTC and sellers willing to sell at a price down to $5,983/BTC.

The overlap between $5,996 and $5,983 is possible because of sFOX's aggregated orderbook from many global exchanges and liquidity providers and is an arbitrage opportunity to sFOX traders.

How does a depth chart work? (3)

Buy Walls

Buy walls are a large number of buy orders, typically placed on the order book all at once, below the current price.

Notice the large number of green bids/buys on the left side of the image at $671/BCH.

How does a depth chart work? (4)

Sell Walls

Sell walls are a large number of sell orders, typically placed on the order book all at once, above the current price.

Notice the large number of red asks/sells on the right side of the image at $6,000/BTC.

How does a depth chart work? (5)

Related links

How to trade Cryptocurrency: A Glossary of Terms

Why Bitcoin Arbitrage Happens, and Where You Can Find It

How does a depth chart work? (2024)

FAQs

How does a depth chart work? ›

A depth chart is a tool for understanding the supply and demand of Bitcoin at a given moment for a range of prices. It is a visual representation of an order book, which is the outstanding buy or sell orders of an asset at varying price levels.

What is the use of depth chart? ›

A depth chart shows the demand and supply of a specific stock, commodity or currency. To set up a Depth Chart you need two series, Bids (green area) and Asks (red area). The ticks along the vertical axis are the sum of all offers at that price or lower.

What is a depth chart in baseball? ›

The typical Major League Baseball depth chart consists of a list of players at each position, with the starter or first-string player listed first, followed by replacement and platoon players.

What is a depth chart in football? ›

A depth chart ranks players per position and sorts them on their playing time probability. Starters are ranked highest, because they are perceived to be the best at the position by their coach. Depth charts are made by position or detailed position.

How does depth map work? ›

Depth maps contain information about the distance of objects from a specific perspective or reference point (like a camera lens). Each pixel is assigned a value to represent the distance of that pixel from the reference point which creates a 3D representation of the scene for its RGB image or virtual scene.

How does depth estimation work? ›

Depth Estimation is the task of measuring the distance of each pixel relative to the camera. Depth is extracted from either monocular (single) or stereo (multiple views of a scene) images. Traditional methods use multi-view geometry to find the relationship between the images.

What is the function of depth? ›

Depth functions were developed to extend the univariate notions of median, quantiles, ranks, signs, and order statistics to the setting of multivariate data. Whereas a probability density function measures local probability weight, a depth function measures centrality.

What are the depths on a chart? ›

Numbers on a nautical chart are depth measurements.

The depths may be in either feet or fathoms (the chart will indicate which). A fathom is a nautical unit of measurement and is equal to six feet .

What is the purpose of in depth reading? ›

In-depth reading is used to. gain deeper meaning and comprehension of a text. research detailed information for an assignment. read difficult sections of a text.

How do you read a depth chart order? ›

The X-Axis measures the price, while the Y-Axis measures the number of orders. The green area on the left represents the lowest prices that customers are looking for. The red area on the right represents the highest prices sellers desire. The split represents the price levels from the most recent trade in the middle.

What are the numbers on a depth chart? ›

A common depth that runs along a shoal or shore is called a depth contour and appears as solid line with a number that states the depth. Depths are designated in feet, fathoms (six feet) or meters (3.3 feet) and each chart will specify what measurement is used for its depths or “soundings”.

What does 6 3 mean in baseball? ›

5. If the hitter grounds out to shortstop, for example, write in "6-3," which shows the shortstop threw him out at first base. If the hitter flies out to left field, write a "7." If the batter gets a hit, write in the hit according to which base he reached.

How do depth charts work? ›

You can use the Depth Chart to indicate a specific price point at which you would like to place a limit or stop-limit order. Once you have selected an order type, simply hover over either side of the chart based on the order you wish to place (buy or sell) and choose a specific price from the chart.

What is a depth chart in NBA? ›

The following NBA Depth Charts are not necessarily based on who starts, but who plays the most minutes. Players highlighted in yellow are currently out (or limited) due injury, illness, personal reasons, or suspension.

How do you read a depth chart map? ›

The first number indicates the number of fathoms. The second number, which will be a small subscript, is the number of additional feet. For example, a listing of 0 and 3 means a depth of 0 fathoms, 3 feet. A listing of 3 and 2 means 3 fathoms, 2 feet, or 20 feet total.

What is the +2 depth in Crypto? ›

The "+2% depth" refers to a feature found on cryptocurrency exchange platforms that displays the order book depth for a particular trading pair. In simpler terms, it shows the volume of buy and sell orders within a 2% range of the current market price.

What does market depth tell you? ›

Market depth refers to the ability of the market to sustain a substantially larger order without making an impact on the security's market price. It also refers to the number of shares of a given company that may be purchased without creating a significant level of price appreciation of the particular stock.

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