A large market order walks up the book and fills above the best ask
The order book is the live list of resting orders. The buy side, or bids, shows prices buyers will pay and the quantity at each. The sell side, or asks, shows prices sellers will accept and the quantity at each. The best bid is the highest buy price, and the best ask is the lowest sell price.
The spread is the gap between them, and the middle price, halfway between the two, is a reference point. A market order does not fill at the middle. It takes the best available price, then the next, then the next, until its quantity is filled. The chart follows an order walking up the asks.
Impact cost is the cost of that walk, measured as the gap between the average price the order gets and the middle price before it was placed. A thin book, a large order or a hurried order all raise it. The spread is paid on a small order too, while impact grows with size, so the two costs are different.
Tick size is the smallest allowed change in price. The exchange sets it in the contract specification, and it sets the grid on which bids and asks can sit. The dated chain files behind these pages hold settlement and closing prices, not bids and asks, so no spread can be read from them. A cost estimate needs the book itself, and the lot size question sets the quantity an order has to fill.
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study