Aggressive / passive
Whoever crosses at market chose the moment; whoever posted a limit chose the price.
In the chapter
What you are looking at, before looking at anything
From the same chapter
- BidThe highest price someone will buy from you now. It is what you sell at.
- Ask / OfferThe lowest price someone will sell to you. It is what you buy at.
- SpreadThe difference between the two. The toll for getting in and out.
- Order bookThe two lists of intentions. It shows orders, not trades.
- SlippageFilling worse than the price you saw, by eating several levels of the book.
- LiquidityCapacity to absorb a trade without moving. Not fixed: it changes with the hour and the news.
- LeverageTrading more notional than deposited. It does not improve accuracy: it multiplies consequence.