Post
Topic
Board Altcoin Discussion
Market Depth / Spread
by
money.investment
on 01/09/2015, 16:25:56 UTC

Market Depth / Spread





The image above demonstrates the spread for the market. The tiny tapering gap between the green and red areas is the spread.

X- axis
- denotes the price

Y - axis denotes the volume of orders placed at the corresponding price

Green Area
- Buy Orders

Red Area - Sell Orders.

The green area has steeper edge towards the spread gap, compared to the red area. This indicates that selling (execution of buy orders)
in large volume is required  lower the price.

Whereas the red area (sell orders) has flat volume requirement of  buying 930 XPM, to take  from 0.00026 to 0.00035. To achieve
target of 0.00038, around 1870 XPM should be bought.


Using Large Spread

Some coins which have low average volume, can have very large spreads. Here the given spread is 0.00025013 to 0.00025352 or 1.35 %.

If trading fees is 0.3 % of the trading volume, then this gap can be used for profit.

For example - If you manage to buy at 0.00025040 and then execute sell order at 0.00025340.

Then you made 0.59 % profit, after the trading fees. Please make sure  that, volume of trade used for this technique, is not much larger than
the average executed volume of recent trades, so that your trade doesn't disrupt the equilibrium.
 

NOTE :


1. Spread is dynamic, with every execution of order, it can change compelety.

2. Coins with lower volume, can take a while for executing even for the edge (edge of the spread) orders .

3. Spread maneuvering is best used when the market is stable.


More to come -- Placing order on both sides, Creating Avalanche in market, and more ..