In stock-market terminology, what is an order book?

In stock-market terminology, an order book is a record of buy and sell orders for a security.

Electronic trading venues organize the book by price and time priority. Buy orders, or bids, are generally ranked from the highest price downward, while sell orders, or offers, are ranked from the lowest price upward. The best bid and best ask form the currently visible top of the book.

When compatible orders meet, a trade can occur and the matched orders are removed or reduced. Unfilled limit orders may remain in the book until they execute, expire, or are canceled. Market orders usually seek immediate execution and may consume several price levels when available liquidity is limited.

Order books can reveal displayed supply and demand, but they do not show every possible trading interest. Hidden orders, dark venues, cancellations, and rapidly changing quotes mean that the visible book is only a partial view of the market.