The Open Xetra Order Book
- The open order book can assist the evaluation and forecast of a stock’s short-term development.
- It supports you in the skillful placement of your order.
- You can inspect the liquidity of secondary stocks in a narrow market.
What is displayed in the Xetra order book
The open order book provides the ten best bid and ask limits with the cumulated number of shares traded and the number of orders with the respective limit. On the Internet, the offered volumes are visualized as green bars (bid offers) and red bars (ask offers).
The above detail shows the two best limits for the Adidas share. The order book depth can be opened by clicking on the plus icon and closed with the minus icon.
The most important columns in the order book are ‘Bid’ und ‘Ask’, where the placed orders’ limits are listed. The bid column contains the buy offers, also called bids. They are the ten highest prices at which market participants are at that moment willing to buy a particular stock. If they wish to sell the stock, this is the relevant side of the order book.
The ask column displays the ten highest sell offers at which market participants are willing to sell a particular share. Together, bid and ask form the spread of a security.
In the columns left and right of the bid and ask columns (’Bid Vol’ and ‘Ask Vol’), the volume of the respective bids and asks is shown, i.e. the total quantity of shares available at that price. The quantities of bid and ask orders which comprise the volume are listed left and right of these columns.
In our example, this means that one bid order for a total of 100 Adidas shares at a price of €24.97 is listed in the first position of the bid side of the order book, followed by one bid order, with a buyer willing to pay €24.96 for 500 Adidas shares. This bid is opposed by two ask offers for 403 Adidas shares at €24.99, followed by one order for a total of 217 shares at €25.00.
In the order book chart, the bid and ask limits are followed by the most recently determined price, in this case €24.97, the current trading phase (Ph) and the exact time at which this price was fixed, as well as the previous day’s closing price.
How does execution occur?
Orders are executed on Xetra when bid and ask offers can be matched. Either the limits correspond or market participants enter market orders, i.e. orders without limits which are executed at the next available price. In the execution, market orders have precedence over limit orders. Price/time priority is basically applicable.
Upon execution, orders are removed from the order book and the next highest bids and asks take their place.
How to read the order book
The order book provides valuable information which can assist you in different investment situations. It enables you to assess whether a stock is more likely to rise or fall in the near future as you have access to current demand and supply data. The order book enables you to place your own bid or ask orders more expertly and thus more profitably. In a narrow market, you can inspect a secondary stock’s current liquidity. Read on for examples on how to interpret the order book.
The example above displays more numerous and voluminous orders on the bid side of the order book, which can cushion the share from below. On the ask side, a more voluminous ask order is placed at €25.75, which slows an upward trend. The share’s current positive development suggests that it will further rise in the short term.
Pressure to sell
In this case, there is a backlog of ask orders. In addition, the voluminous ask order of 25,000 shares for €7.25 poses a hurdle for price gains which would first have to be overcome.
The as side of the share is also well stocked, especially at €7.90 and €8.20 with two major ask orders – obstacles on the way up. On the bid side, only one notable order is displayed, at €7.43. The share has no support from below and is thus on a downward trend.
The example below displays a fairly balanced order book.
Without a trend
How to access the order book
The order book is available as index lists, but your own watchlist can also be displayed. Simply log on for access.
In addition, the respective order book is available on the data sheet of each stock. Simply follow the link below the chart.