Trade Book and Order Book
Trade Book and Order Book
In this tutorial, you will understand the differences between trade book and order book.
What is Trade Book?
The Trade Book is a record of all executed trades in a trading account. It provides details about completed buy and sell transactions, including price, quantity, and execution time. Traders use the trade book to analyze past trades, track profit and loss, and evaluate trading strategies.
What is Order Book?
The Order Book is a real-time ledger that displays pending buy and sell orders in a market. It consists of bid (buy) and ask (sell) prices along with the corresponding order quantities. The order book helps traders assess market depth, liquidity, and potential price movements.
Differences Between Trade Book and Order Book
Some of the differences of trade book and order book are as follows:
| Trade Book | Order Book | |
|---|---|---|
| Definition | Records executed trades | Displays active buy and sell orders |
| Data Included | Price, quantity, time of executed trades | Bid prices, ask prices, order quantity |
| Usage | Analyzing past trades and P&L tracking | Assessing market liquidity and price trends |
| Real-time Updates | Updates after trade execution | Continuously updates with new orders |
| Visibility | Only visible to the trader | Visible to all market participants |
| Purpose | Reviewing trading history | Monitoring market demand and supply |
