Educational material from 
What you will learn
- Distinguish the best quoted price from the quantity available there.
- Calculate an order’s total cost across several price levels.
- Explain why a single snapshot does not measure all liquidity.
Same best price, different quantities available
Both fictional stocks have a best bid of SEK 100 and a best ask of SEK 101. Each spread is SEK 1. The deeper sell-side list has 1,000 shares at SEK 101. The thinner list has only two there, followed by three at SEK 103 and five at SEK 106.
We examine a buy order for ten shares and assume the lists stay fixed, all listed orders are available and no other buyer goes first. Fees, taxes and currency effects are excluded. The deeper snapshot offers the entire requested quantity at the first level. The thinner one does not, even though both initially show SEK 101.
If the table does not fit, scroll it sideways.
| Ask price | Deeper list | Thinner list |
|---|---|---|
| SEK 101 | 1,000 shares | 2 shares |
| SEK 103 | Not needed for this comparison | 3 shares |
| SEK 106 | Not needed for this comparison | 5 shares |
Calculate the cash cost before the average price
In the deeper snapshot, ten shares cost 10 × 101 = SEK 1,010, averaging SEK 101. In the thinner one, they cost 2 × 101 + 3 × 103 + 5 × 106 = 202 + 309 + 530 = SEK 1,041. Its average is SEK 104.10 even though the first displayed ask is SEK 101.
The difference between these specified purchases is SEK 31. Buying only one share could, however, cost SEK 101 in either model. A price available for a small order therefore need not apply to a larger one. Calculate using the quantity in the actual question and note which levels the order consumes.
Order depth shows quantity rather than the entire market
Order depth describes visible quantities at different levels at one moment. The snapshot can quickly change as orders are added, cancelled or executed. Our table covers only the sell side; it says nothing about how easily the same-size holding could be sold into the bid side.
Trading volume over a period, the number of transactions and how the market responds to new orders can provide further information. None appears in the little table. Say that the thinner snapshot gives a higher average for our particular purchase, rather than treating one screenshot number as a permanent assessment of a stock’s liquidity.
Record what the simplified transaction leaves unknown
Start your own task with a time, buying direction, quantity and visible price levels. If a list has room for only six shares and you ask about ten, information for the whole order is missing. Do not invent the price of the last four. Mark that part as unknown and distinguish incomplete evidence from a calculation error.
A limit can constrain permitted prices, but cannot create new sellers. Read the order lesson to connect price boundaries with partial fills. Investiq’s portfolio guide explains holdings and cash in digital practice; this order-depth table is separate teaching material and does not promise a live order book in the app.
Try it yourself
A frozen sell-side list has two shares at SEK 10 and three at SEK 12. Buy all five without fees. What is the total cost and average price? Can the same information establish the price of a sixth share?
Show the solution and explanation
Five shares cost SEK 56, averaging SEK 11.20. The price of a sixth share is unknown.
2 × 10 + 3 × 12 = SEK 56. Divide by the five filled shares: 56 / 5 = SEK 11.20. There are no further sell orders in the table, so it cannot establish a sixth price.
Check your understanding
Does an identical spread prove two large purchases get the same average price?
No. Available quantities and subsequent levels can differ.
Does our sell-side list show how easily you can sell later?
No. That also needs information about the bid side at the later time.
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More lessons on this topic
Trading, risk and benchmarks
Sources and examples
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
