How crypto markets work
Bid, ask and spread, liquidity, order books, maker and taker fees, and trading hours.
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Lessons
- 01Bid, ask and spread in crypto.The bid is the highest price a buyer will pay for a coin right now, and the ask is the lowest price a seller will accept. You buy at the ask and sell at the bid. The gap is the spread, a cost you pay on every trade. Crypto traders measure it as a percentage of the price.
- 02What is liquidity in crypto?Liquidity is how easily you can buy or sell a coin without moving its price. A liquid coin has many orders close to the current price, so the spread is narrow and a large order fills near the quoted price. In a thin market, the same order eats through the book and fills at worse prices.
- 03How to read a crypto order book.An order book is the live list of limit orders waiting on an exchange. Sell orders, the asks, sit above the price and buy orders, the bids, sit below it. Each row shows a price and an amount. The gap in the middle is the spread, and the running totals show how far a large order would move the price.
- 04What are maker and taker fees?A maker fee applies when your order waits in the order book and someone else fills it later. A taker fee applies when your order fills straight away against an order that was already waiting. Exchanges usually charge takers more, because makers supply the orders that keep spreads narrow.
- 05When does the crypto market trade?Crypto coins trade 24 hours a day, seven days a week, on exchanges around the world, with no official open or close. A crypto CFD at a broker follows the broker's own schedule, including any daily break and its weekend rules. You find those hours in the symbol's contract specification.