What is the difference between an order book and a DOM?

The book is the data; the DOM is one display of it. A depth of market ladder typically shows the top five to ten levels, refreshed live, on a vertical price axis. The book extends further and exists whether or not anything is drawing it.

Can I see every order in the book?

Not on a normal feed. Market-by-price data collapses each price to one quantity, so individual orders are already gone. Even with market-by-order data, iceberg reserves and hidden orders are never published, and stops do not exist in the book until they trigger.

Is a bid-heavy book bullish?

There is no dependable mapping from displayed imbalance to direction. Resting size can be cancelled in a millisecond, and participants with real size have no incentive to advertise it. What carries information is whether size was traded, not whether it was shown.

Glossary

Order book (CLOB)

Also called: central limit order book · CLOB · limit order book

An order book is the exchange's list of resting limit orders at each price, ranked by price then time. On a central limit order book, every participant queues in the same structure. Its state, plus the flow of aggressive orders crossing the spread, is the whole of order flow.

Two order types, one queue

A limit order says this price or better and rests in the book, adding liquidity. A market order says now and removes it. Price moves only when the aggressive side consumes everything resting at the touch and has to reach the next level.

A central limit order book means this happens in one venue-wide queue with published rules, normally price first then time. Arrive at a price earlier and you are filled earlier. That shared structure is what makes order flow trading possible at all.

State and flow

The book is state: what is available now, and therefore what could happen. The trade feed is flow: what was paid for. Depth of market shows the first, tape reading the second. Neither is complete alone, and they are not equally reliable — resting size can be withdrawn for free, executed size cannot be taken back.

Aggregated, or listed order by order

Most feeds deliver market-by-price: one total quantity per price, sometimes a count of orders. Market by order delivers each order individually, with an identifier and a queue position. Vendors sell both as order flow, so the test is mechanical — is there an order ID per order? If not you are reading a sum, and you cannot see one participant leave.

What is not in it

Icebergs show a fraction of their size, hidden orders show none. Stops are triggers held elsewhere, not book entries, so they do not appear until they fire — which is why a liquidity sweep is invisible in advance. And a book describes one venue; in a fragmented market, the rest of the intentions sit elsewhere.

A worked example

Take a synthetic ES book: 340 lots bid at 5 312.00 against 95 offered at 5 312.25, with the next two offers holding 120 and 85. On the displayed numbers the bid outweighs the offer by more than three to one.

A single market buy of 300 lots clears the 95, then the 120, then 85 of the next, and the best offer is three ticks higher. The 340-lot bid never traded and was still there afterwards. The imbalance was real, visible, and directionally worthless — it was resting size, and resting size is free.

The trap

Reading displayed imbalance as a directional signal. Placing a limit order commits nothing, and cancelling it costs nothing. Lifting the offer costs the spread and creates a position. Weighting those two the same because they appear on the same screen is the central error of book watching.

The claim usually attached to this is that the large majority of resting orders are cancelled rather than filled. Plausible and endlessly repeated, but the proportion varies by venue, instrument and distance from the touch, and no retail feed lets you verify it for your contract. Take it as a reason for caution, not as a number you own.

Frequently asked

What is the difference between an order book and a DOM?: The book is the data; the DOM is one display of it. A depth of market ladder typically shows the top five to ten levels, refreshed live, on a vertical price axis. The book extends further and exists whether or not anything is drawing it.
Can I see every order in the book?: Not on a normal feed. Market-by-price data collapses each price to one quantity, so individual orders are already gone. Even with market-by-order data, iceberg reserves and hidden orders are never published, and stops do not exist in the book until they trigger.
Is a bid-heavy book bullish?: There is no dependable mapping from displayed imbalance to direction. Resting size can be cancelled in a millisecond, and participants with real size have no incentive to advertise it. What carries information is whether size was traded, not whether it was shown.