Interactive Education

How Markets Work

Understand the mechanics that move prices, from market cap to order books. No jargon, just interactive simulations you can play with.

Market Cap The Order Book Volatility Spreads & Liquidity
Module 01

What Is Market Cap?

Market capitalisation is simply price multiplied by the number of units in circulation. A higher market cap doesn't mean a higher price — it's about the total value of all units combined.

Price per unit $50.00
Circulating supply 100M
Price
$50.00
×
Supply
100M
=
Market Cap
$5.00B
Key insight: A token priced at $0.01 with 100 billion units has the same market cap as one priced at $1,000 with 1 million units. Price alone tells you almost nothing — always check the supply.
Module 02

The Order Book

Every market has an order book — a live list of buy orders (bids) and sell orders (asks). When you place a market order, it eats through the other side. Watch what happens to the price.

Mid Price
$100.00
Spread: $0.10 (0.10%)
Bids (Buyers)
Asks (Sellers)
Key insight: Large orders move the price because they consume multiple levels of the order book. This is called "slippage." The thinner the book, the more the price moves.
Module 03

Understanding Volatility

Volatility measures how much a price swings over time. The same starting price can lead to wildly different outcomes. Both paths below start at $100 — hit play to see the difference.

Path A Final
$100.00
Path B Final
$100.00
Max Drawdown
0%
Key insight: Higher volatility means higher potential returns and higher potential losses. Two assets with the same average return can have completely different risk profiles. Volatility is the price you pay for opportunity.
Module 04

Spreads & Liquidity

The spread is the gap between the highest bid and lowest ask. It's a hidden cost of trading. Liquid markets have tight spreads; illiquid markets can cost you significantly more.

Market Liquidity High
Best Bid
$99.95
Spread
$0.10
Best Ask
$100.05
Cost to trade $10,000
$5.00
vs. liquid market
1x
Key insight: In liquid markets (major stocks, large-cap crypto), spreads can be fractions of a penny. In illiquid markets (small-cap tokens, exotic options), spreads can be 2-5% — meaning you lose money the instant you enter a trade.