Market Depth

Market depth refers to the measure of a specific market’s capacity to absorb large market orders without causing significant price fluctuations in the underlying security. It takes into account the overall number and breadth of open orders, bids, and offers for a particular asset. A deep market depth indicates a high level of liquidity, meaning that substantial orders are required to significantly impact the price. Market depth is synonymous with liquidity depth and plays a crucial role in assessing market conditions.