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Spot Trading on a CEX — How the Order Book Really Works
Spot trading is buying or selling an asset for immediate delivery at the current market price. On a CEX (Binance, Coinbase, Kraken), every spot pair has an order book — a live list of buy orders (bids) and sell orders (asks). Your trade matches against existing orders; the price you actually get depends on how deep the book is. The simulator below lets you place market and limit orders against a generated order book and watch what happens.
ASKS (sellers)
BIDS (buyers)
Side
Order type
Amount (BTC)
Why market orders eat the book top-down
A market BUY pulls liquidity from the asks side starting at the LOWEST ask. If you want 5 BTC and the best ask has 1.2 BTC, you eat that 1.2 at the best price, then the next level up at a worse price, and so on. The 'average fill price' is the weighted average across all eaten levels. The difference between the best price and your average is slippage.
What is an order book?
Every trading pair on a CEX has two stacks of orders: bids (people willing to BUY at a given price, sorted highest first) and asks (people willing to SELL at a given price, sorted lowest first). The gap between the highest bid and the lowest ask is the bid-ask spread. Liquid pairs (BTC/USDT) have tight spreads (~0.01%). Illiquid altcoins have wide spreads (1-5%+).
Market order vs limit order — the real difference
A market order says 'buy/sell NOW at whatever price'. It eats up the order book from the top down — you get the best available price for the first share, the next-best for the second, and so on. A big market order on a thin book causes slippage because it walks deep into the book. A limit order says 'buy/sell at THIS price or better'. It sits in the book until someone matches it. You get exactly your price (or better), but you might wait forever — or never fill at all.
When to use which
Market orders fit when execution speed matters more than price (you saw news, you want out now). Limit orders fit when you have a target price and time to wait (e.g. 'buy BTC if it dips to $65k'). Beginners almost always use market orders without realising they're paying slippage; on a liquid pair with $10 trades that's invisible, but on a $50k order through a thin altcoin book it can cost 3-5%.
Maker vs taker fees
Limit orders that sit in the book before matching are MAKER orders (you 'made' liquidity). Market orders or limits that immediately match are TAKER orders (you 'took' liquidity). Most CEXes charge taker fees roughly 2× maker fees. Binance VIP0: 0.1% taker / 0.075% maker after the BNB discount. Pro traders structure execution around making liquidity to capture the spread + lower fees.
Frequently asked questions
+Why does the same coin have a different price on different exchanges?
Each exchange has its own order book — no global price. Arbitrageurs keep prices roughly aligned (within 0.1-0.5% on liquid pairs) by buying on the cheaper exchange and selling on the more expensive one. Big gaps appear during volatility, in geo-restricted exchanges, or in stablecoin pairs of different fiat regions.
+What is 'depth' in an order book?
Depth is how much volume sits at each price level. A 'deep' book has large orders close to the current price, meaning even big trades cause little slippage. Thin books have small orders that get eaten quickly. BTC/USDT on Binance has multi-million-dollar depth within 0.1% of mid; a random alt might have $5k of depth within 1%.
+Why does my limit order not fill even though price 'touched' it?
Because the matching engine fills orders price-time priority. Someone earlier in the queue at your exact price got filled first. If only a small amount traded at your price, you might end up partially filled or not at all. Solution: place limit slightly inside the spread (eg 1 tick away from best bid/ask) if you actually want execution.
+Are spot trades really 'instant'?
Order matching is instant. But your funds move into a custodial balance on the exchange — actually 'getting' your crypto means withdrawing to a self-custody wallet, which takes blockchain confirmation time. Until you withdraw, the exchange holds the keys.
+Should I use market or limit as a newbie?
Limit orders, almost always. Set a price you're happy with and walk away. The discipline of choosing a price kills more impulsive trades than any other habit. Use market orders only for tiny trades or when execution speed genuinely matters.