BTC-e inner workings

[110240]

Forgive me if this has been posted before, but I'm wondering if someone with more experience than me can explain how the buy and sell orders work on btw-e, or refer me to the link if its already been discussed?  I think the price is calculated based on how much goes in/out but I'm not sure how?  Thanks guys...

[franky1]

the price is not done by how much is deposited or withdrawn. the price comes from the order book.. (in laymans: the lists of buys and sell)

i know of people that have alot of BALANCE but dont always have orders set. so their balance has no bearing on the price.

what you will find is the sheep on btc-e are following MTGOX valuations. when mtgox jumps up they follow, when it falls they follow.

same as the LTC/USD if you compare the 2 graphs of BTC/USD to LTC/USD they are near on exactly the same.

its the orders that set th value and there a lot of large players that throw in large orders or eat up a certain number of orders to make BTC-e prices follow mtgox prices.

[Tirapon]

the price is not done by how much is deposited or withdrawn. the price comes from the order book.. (in laymans: the lists of buys and sell)

i know of people that have alot of BALANCE but dont always have orders set. so their balance has no bearing on the price.

what you will find is the sheep on btc-e are following MTGOX valuations. when mtgox jumps up they follow, when it falls they follow.

same as the LTC/USD if you compare the 2 graphs of BTC/USD to LTC/USD they are near on exactly the same.

its the orders that set th value and there a lot of large players that throw in large orders or eat up a certain number of orders to make BTC-e prices follow mtgox prices.

Its not necessarily about sheep following price. For quite a while there was around a 7% difference in price with BTC-e prices being lower. As its more difficult to get dollars on BTC-e, they sell for a premium. I think the price difference was a reflection of the fees applied when moving fiat from Gox to BTC-e, making arbitrage between the two exchanges quite difficult. Interestingly, during the recent price drop the price on BTC-e was higher than Gox, which actually shows that price is in fact somewhat independent on each. You'll always find that a big enough price difference will be evened out by arbitrage between the exchanges.

[110240]

how is the price calculated from the order book?

[Tirapon]

Price seems to simply be given as the price at which the last trade was made

[flound1129]

what you will find is the sheep on btc-e are following MTGOX valuations. when mtgox jumps up they follow, when it falls they follow.

http://en.wikipedia.org/wiki/Arbitrage

[schizoid]

how is the price calculated from the order book?

Suppose the last trade between customers of the exchange was at $107.

These orders are on the book:
Buy 100 @ $100
Buy .01 @ $106
Sell .01 @ $109
Sell 100 @ $110

The live chart shows a price of $107.

If you want to buy bitcoins, you will be quoted a price of $109. If you buy 10 BTC at market, you will pay $109/BTC for .01 BTC and $110/BTC for the other 9.99 BTC. The live chart will uptick to $110.

OTOH, if you want to sell bitcoins, you will be quoted a price of $106. If you sell 10 BTC at market, you will receive $106/BTC for the first .01 BTC and $100/BTC for the other 9.99 BTC. The live chart will downtick to $100.