Top-of-Book Pricing

Top of book is the best bid and best offer currently available in an order book, and top-of-book pricing means quoting clients from that first level only. It produces the tightest visible spread, but the size behind it is limited: once an order is larger than the quantity shown at the top level, the remainder fills deeper in the book at less favourable prices. Many retail platforms display a single top-of-book quote, while professional tools show the full depth beneath it. Comparing brokers on the top-of-book spread alone can therefore mislead, because two venues advertising the same spread may carry very different amounts of tradable size at that price, and that size determines what a real order actually costs.