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Reading the Order Book and Spread

Published by the Drishti team · Reviewed 2026-11-07 · Researched and edited with AI assistance.

Module 3 · Chapter 4 of 8 · ~5 min read · Tax and law facts as of November 2026

Last chapter, a market order bought right now at the best price on offer, while a limit order waited for yours. This chapter asks where that best price comes from. What is an order book, what is the spread, and why is the price you pay different from the price on screen? Every price in the examples is illustrative, not live; one dated live snapshot is marked near the end.

• ₹6,000BTC spread in our book
• 0.096%spread as share of ask
• ₹96spread cost, ₹1,00,000 round trip
• ₹104same cost, ₹10,000 in a small coin

4.1 Bids, asks and the best price

An order book is the live list of every buy and sell offer waiting on an exchange. Think of the board at an airport currency counter: one rate to buy from you, another to sell to you.

A bid is the price a buyer offers, and an ask is the price a seller wants. Most apps stack bids below and asks above, so the best prices meet in the middle.

The best bid is the highest price any buyer offers, and the best ask is the lowest price any seller will take. Together they form the top of the book.

In our illustrative Bitcoin (BTC) book, the best bid is ₹62,38,000 and the best ask is ₹62,44,000. A market buy matches the ask, and a market sell matches the bid, so the two prices differ at the same moment.

4.2 The spread in rupees

The spread is the best ask minus the best bid: ₹62,44,000 minus ₹62,38,000 is ₹6,000. Divided by the ask, that is 0.096%.

You pay it when you buy and sell right away. You buy at the ask and sell at the bid, so one spread is lost per round trip, not two. Measured from the middle price, about half falls on the way in and half on the way out.

The spread is not a fee to the exchange. It usually goes to the traders whose offers you took, unlike a currency counter, which keeps its margin.

4.3 Depth and the price you actually get

Depth is how much sits on offer at each price. In our book, the best ask holds only 0.020 BTC, and the next price up holds 0.030 BTC.

A market buy takes offers from the lowest ask upward until your order is full. Say you buy 0.05 BTC:

• 0.020 BTC at ₹62,44,000 costs ₹1,24,880.
• 0.030 BTC at ₹62,45,000 costs ₹1,87,350.
• Total ₹3,12,230, an average of ₹62,44,600 per BTC.

That average is ₹600 above the ask on screen. A bigger order walks further up the book, and the average drifts further from the price you saw.

4.4 Liquid pairs and thin pairs

A liquid pair has many buyers and sellers, so spreads are tight and depth is large. An altcoin, any coin other than Bitcoin, often has few offers.

The cost of an immediate round trip is the spread as a share of the ask. For each row, the formula is ₹10,000 × (ask − bid) ÷ ask. These pairs and prices are illustrative.

Ether (ETH) is the second-largest coin by market value. The wider the spread, the more you lose at once. The small coin costs over ten times more than Bitcoin to trade in and out.

An INR pair is a coin priced in rupees; a USDT pair is priced in Tether, a dollar-linked coin. INR books on Indian exchanges often run thinner than USDT books, so spreads are often wider. In our snapshot on 6 November 2026, CoinDCX showed BTC/INR at about 0.4% and BTC/USDT under 0.01%. It varies by coin and hour. At 0.4%, the round trip on ₹1,00,000 would cost nearer ₹400 than our ₹96.

This chapter is educational only. It is not tax, legal or investment advice. Check current rules with a chartered accountant.

Next: fees, spread and TDS on one trade.

Key takeaways

• Bids are buyers and asks are sellers; the best two prices set the spread.
• The spread is a cost you pay once on every immediate round trip.
• Depth tells you how big an order the book can take at one price.
• A market order eats offers from the best price up, so the average fill is worse.
• Thin pairs and small coins have wide spreads, so trading them costs far more.

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Educational & illustrative only — not investment advice. Drishti Pro publishes AI-generated trade ideas and their public track record for information. Crypto is volatile and you can lose money. Nothing here is a recommendation to buy or sell any asset. Do your own research.