Market depth refers to the measure of supply and demand for a specific security or market at various price levels, typically visualized through an order book that displays the number of buy and sell orders at different prices. It provides insights into the liquidity of a market, showing how much of a security can be bought or sold without significantly impacting its price. A deeper market, with a larger number of orders at various price points, generally indicates higher liquidity, which can lead to more stable prices and reduced volatility. Traders often use market depth to assess potential price movements and gauge the strength of market trends.