Depth
The ability of a security to absorb buy and sell orders without the stock price dramatically moving in either direction. Investopedia Says:
Securities with good depth will be relatively liquid, and large orders will not affect price significantly. On the other hand, securities with poor depth are more likely to have their price affected by large orders to buy and sell.
To gauge the depth of a market, investors can search for the different prices and sizes (bid and ask sizes) of orders accumulating below and above the market bid and ask prices. Related Terms:
Ask
Ask Size
Bid
Bid Size
Liquidity
Liquidity Risk
Price Continuity |