2013issue C0725
Depth of market ladder versus resting order ticket
A depth-of-market ladder shows nearby resting limit interest and sends market orders at the best available price. Good-till-cancelled rest farther from the inside market is easier to manage on a ticket that can show distant prices and a longer order life without extra scrolling.
- A depth-of-market panel shows nearby resting limit interest. It is not a display of stop instructions or of market orders, which never rest in the trading book.
- Limit orders can be placed by selecting a price on the ladder and then dragged to a new price without the keyboard, but a limit far from the inside requires substantial scrolling.
- Most depth panels default to day-session order life, so a good-till-cancelled instruction requires extra platform steps.
- The same platforms also support chart or standard-ticket placement, which can show a longer time frame and distant prices without ladder scrolling.
What a depth-of-market panel shows
A depth-of-market panel is a ladder of nearby resting limit size with one-click send, drag-and-drop price changes, and account stats for the contract on screen. The panel shows nearby resting limit interest. It is not a display of stop instructions or of market orders, which never rest in the book.
The trading book is the visible stack of other participants' working limit interest around the current market price. Stops and immediate market trades are not part of it.
How market and limit instructions behave
A market order is an instruction to trade immediately at the best available price. It does not rest in the displayed book. Market orders on a depth panel are sent at the best available price at that moment and therefore never become part of the visible book.
A limit order is a working buy or sell at a chosen price that rests in the visible book until it trades, is cancelled, or expires. Limit orders can be placed by selecting a price on the ladder and then dragged to a new price without using the keyboard.
Distance, order life, and displayed size
Depth ladders typically show only prices near the market, so a limit far from the inside requires substantial scrolling.
A day order is a session-lived instruction that expires at the close unless the trader overrides it with a longer life. Most depth panels default to day-session order life, so a good-till-cancelled instruction requires extra platform steps. A good-till-cancelled order life stays working across sessions until filled or cancelled. On many depth ladders it is not the default and takes extra steps.
Displayed book size can understate intended quantity when large working interest is hidden with iceberg-style quantity. An iceberg order is a working size that shows only a slice of intended quantity in the public book so displayed depth is incomplete.
Click mappings differ by platform (limit versus stop, or buy versus sell), so turning off confirmation can send the wrong instruction immediately.
Chart and standard-ticket placement
The same platforms that speed near-market day entry also support chart or standard-ticket placement, which can show a longer time frame and distant prices without ladder scrolling.
All readings on this track · 8 readings
- 1982Swing charts, stop-loss orders, and good-till-cancelled covers in a bond-market coil
- 1982Park good-till-cancelled targets after commissions at the chart bands
- 1987Write the danger-point stop before the trade is accepted
- 1989Christmas tree construction as a five-week monthly procedure
- 2006Constructing the single-price open from overnight flow
- 2008Overnight session routing for good-till-cancelled, limit, and market orders
- 2013Session cutoffs, good-till-cancelled orders, and exchange margin
- 2013Depth of market ladder versus resting order ticket