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How Does “Market Depth” Relate to the Potential for Slippage?

Market depth refers to the volume of buy and sell orders at various price levels around the current market price. High market depth (many orders near the current price) means the market is liquid and can absorb large trades with minimal price movement, thus reducing the potential for slippage.

Low market depth means large orders will "walk the book," causing significant slippage.

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How Does the ‘Spread’ on the Order Book Relate to Market Depth and Liquidity?