Bucketing can mean grouping similar price levels in an order book. Instead of showing every individual price point, the system groups them into 'buckets'—for example, all buy/sell orders between $59,000 and $59,100 for BTC might be shown as one entry.
Alternatively, bucketing refers to an unethical or even illegal trading practice, a term originating from traditional finance. Bucketing occurs when a broker takes a customer's order but, instead of actually placing the trade on the market, informs the customer that it has been done and then attempts to execute it later at a better price. The broker keeps the difference between the original quote and the actual execution price—without informing the customer—and pockets that spread as profit.
Alternatively, bucketing refers to an unethical or even illegal trading practice, a term originating from traditional finance. Bucketing occurs when a broker takes a customer's order but, instead of actually placing the trade on the market, informs the customer that it has been done and then attempts to execute it later at a better price. The broker keeps the difference between the original quote and the actual execution price—without informing the customer—and pockets that spread as profit.