Zerodha Market Depth Explained with Examples

Market depth on Zerodha's Kite platform shows you the live buy (bid) and sell (offer) orders for a stock or F&O contract at different price levels. It helps you understand the liquidity, supply and demand, and potential price movement before you place an order.

Zerodha provides two types of Market Depth views:

• Regular Market Depth (Level 2 data – top 5 bids and offers)
• 20 Market Depth (Level 3 data – top 20 bids and offers for NSE stocks)

What is Regular Market Depth (Level 2 data)?

Regular market depth, also known as Level 2 data, displays:

• The top 5 bid prices (buyers) with their respective quantities
• The top 5 offer prices (sellers) with their respective quantities

For each price level, you typically see:

• Price – the bid/offer price
• Qty – total quantity available at that price
• Orders – number of orders contributing to that quantity

This view is available for both equity and F&O contracts.

Regular market depth helps you:

• See the best available price to buy or sell instantly
• Understand how much quantity is available near the current market price
• Estimate short‑term support (on the bid side) and resistance (on the offer side)

What is 20 Market Depth (Level 3 data)?

20 market depth, also called Level 3 data, goes beyond the standard 5 levels and shows you the top 20 bid and top 20 offer levels for a stock.

Key points:

• Available only for NSE-listed stocks(not F&O contracts, BSE, or MCX)
• Shows 20 best bid prices and 20 best offer prices, each with price, quantity, and number of orders
• Offered by Zerodha as a unique feature among retail brokers in India

With 20 market depth, you can:

• Get a deeper view of liquidity far beyond the best 5 levels
• Identify large buying or selling walls that might act as strong support or resistance
• Better understandorder book imbalance (whether buyers or sellers are more aggressive)
• Make more informed decisions for scalping, intraday trading, or large orders

For a more detailed conceptual explanation of 20 market depth and how to use it in trading decisions, you can refer to the Varsity module on Zerodha’s website.

Understanding Bid Side vs Offer Side

Market depth is divided into two sections:

Bid Side (Buy Orders)

The bid side represents buyers waiting to purchase the stock at different price levels. The highest bid appears at the top because buyers offering the highest price have the best chance of getting their orders executed first.

Offer Side (Sell Orders)

The offer side represents sellers waiting to sell the stock at different price levels. The lowest offer appears at the top because sellers willing to accept the lowest price are matched first.

By comparing the bid and offer sides, traders can quickly gauge current buying and selling interest in a stock. However, market depth should not be used in isolation, as orders can be modified or cancelled at any time.

What is the Bid-Ask Spread?

The difference between the highest bid price and the lowest offer price is known as the bid-ask spread.

Example

Bid Price	Offer Price
₹100.00	₹100.05

In this example, the bid-ask spread is ₹0.05.

Why is it Important?

• A narrow spread generally indicates good liquidity and active trading.
• A wide spread may indicate lower liquidity, making it harder to buy or sell large quantities without affecting the price.
• Traders often review the spread before placing market orders, especially in less liquid stocks.

A tighter spread usually results in better trade execution and lower transaction costs.

Understanding Impact Cost with Market Depth

Market depth can help traders estimate the potential impact of large orders on execution price.

Example

Suppose a stock is trading near ₹100, and the offer side shows:

Offer Price	Quantity Available
₹100.00	100 shares
₹100.05	400 shares
₹100.10	500 shares

If you place a market order to buy 1,000 shares, your order will consume available quantities across multiple price levels:

• 100 shares at ₹100.00
• 400 shares at ₹100.05
• 500 shares at ₹100.10

As a result, your average purchase price will be higher than the best available offer of ₹100.00.

This difference between the expected execution price and the actual average execution price is commonly referred to as impact cost.

Why Impact Cost Matters

• Helps traders assess liquidity before placing large orders.
• Allows better planning of order execution.
• Helps reduce slippage by using limit orders or splitting large orders into smaller quantities.

Reviewing market depth before placing large market orders can help traders avoid unexpected execution prices.

How to View Market Depth on Kite (Regular vs 20 Depth)

You can access market depth both on the Kite mobile app and the Kite web

On the Kite mobile app

1. View regular market depth (top 5 levels)

1. Open the Kite app and go to your watchlist.
2. Tap on the stock/contract for which you want to see market depth.
3. The default quote screen will display key details, including LTP, OHLC, and more.
4. Scroll down to see the regular market depth, which displays the top 5 bids and offers.

2. View 20 market depth (Level 3 – top 20 levels)

1. In the quote view for an NSE stock scroll down to the depth section
2. Tap on “Show 20 depth”
3. A detailed order book-style view will open, showing
• Top 20 bid levels with price, quantity, and order coun
• Top 20 offer levels with price, quantity, and order coun

You can use this expanded view to:

• Check where large buy/sell quantities are placed
• Assess how much liquidity is available if you plan to place large market or limit orders

Alternatively, from the order window

1. Tap the stock on your watchlist or in your holdings to open the Buy/Sell ticket.
2. On the order window, tap the dropper icon (market depth icon).
3. Select “Show 20 depth” to see the full Level 3 data (for eligible NSE stocks).

 

On Kite web

View regular market depth (top 5 levels)

1. Log in to kite.zerodha.com.
2. Go to your MarketWatch and hover your cursor over the desired stock/contract.
3. Click the Market Depth icon (usually a small graph or depth symbol).
4. The default panel shows the top 5 bids and offers (regular market depth).

2. View 20 market depth on web (Level 3)

1. Again, hover over the desired NSE stock in your watchlist.
2. Click on the Market Depth icon.
3. In the depth panel that opens, click on “View 20 depth”.
4. This will expand the order book to show:
• 20 bid levels on the buy side
• 20 offer levels on the sell side.

Use this data to:

• Spot thick liquidity zones where a lot of orders are clustered
• Understand how far the price might move if your order consumes multiple levels.
• Manage slippage risk when trading larger quantities.

When should you use 20 Market Depth?

20 market depth is especially useful for:

1. Intraday traders and scalpers
   
   
• Helps gauge immediate supply and demand beyond the visible 5 levels.
• Useful for timing entries and exits around large order clusters.
2. Placing large orders
   
   
• Before entering a large buy or sell order, you can see how many levels your order might consume.
• Helps decide between market orders and sliced limit orders.
3. Trading less liquid stocks
   
   
• For stocks with lower liquidity, a deeper look at the order book helps avoid unexpected price impact.
4. Monitoring order book shifts
   
   
• The sudden appearance or disappearance of large orders deeper in the book can hint at short‑term sentiment shifts.

Things To Remember

• 20 market depth is available only for NSE stocks on Kite. For F& O, BSE, or MCX contracts, you will still see the regular 5-level depth.
• Market depth updates are real-time, but the order book can change quickly in fast markets.
• Large visible orders may be modified or cancelled; treat depth as an input, not a guarantee.
• Depth is just one tool—use it along with charts, indicators, and your risk management rules.

Conclusion

• Market depth shows live buy and sell orders at different price levels.
• Regular depth (Level 2): Top 5 bids and offers, available across stocks and F&O.
• 20 market depth (Level 3): Top 20 bids and offers, currently available for NSE stocks on Zerodha Kite.
• You can access 20 depth from both Kite mobile (via the quote view or order ticket) and Kite web (via the market depth icon and “View 20 depth”).
• Use 20 market depth to better understand liquidity, manage order execution, and refine your intraday trading decisions.