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DONUTFLIPPER

Walking the order book

WHY THE BEST PRICE IS NOT THE MARKET

3 minute read

This is the idea the whole site is built around. Once it clicks, every other number makes sense.

An order book is not one price. It is a stack of them, each with a limited number of items behind it.

ExampleOne item's demand, as it really looksinvented numbers
$500        1,000 units
$490       20,000 units
$450      500,000 units

The best price is $500. But only a thousand items can be sold at $500. After that, the next buyer pays $490 — and once those twenty thousand are gone, $450.

The mistake

ExampleMultiplying the top price outinvented numbers
1,000,000 × $500  =  $500,000,000

This is fiction. There are not a million items at $500 — there are a thousand.

What this site does instead

It walks down the book level by level, taking what is really there at each price, and stops when the next unit would no longer be worth selling. The total it arrives at is executable profit: what the market as it stands can actually support.

That is also why a trade can have a spectacular price and a small executable profit. The price is real; there is just almost none of it.

Reading it on an item page

The standing-orders panel on any item shows those levels. Units at the top is how many are queued at the best price — the ones you would be stepping in front of. Price levels is how many distinct prices exist at all: one is a single buyer, a dozen is a market.