Logo
Home  >  Order matching system

Order Matching System

An order matching system is an electronic platform used by stock exchanges, brokers, or trading systems to automatically match buy and sell orders for financial instruments such as stocks, bonds, or commodities.The system matches orders based on predetermined rules, such as price-time priority, ensuring efficient and fair execution of trades. By eliminating human intervention, these systems enhance market transparency and reduce transaction costs.

Example

A stock exchange uses an order matching system to pair buy and sell orders for a company’s stock. If a buyer places an order at $50 and a seller agrees to sell at that price, the system automatically matches the orders.

Key points

• A digital platform that automatically pairs buy and sell orders for financial instruments.

• Matches orders based on price-time priority or other pre-set rules.

• Enhances market transparency and reduces transaction costs by eliminating manual processes.

Quick Answers to Curious Questions

It automates the trade execution process, ensuring that buy and sell orders are matched quickly and fairly based on price and time.

Benefits include faster trade execution, reduced transaction costs, and improved market transparency.

Orders are matched based on the best price available, and if multiple orders exist at the same price, the system prioritizes the earliest order.
share facebook share email share linkedin share pinterest share
scroll top

Register to our Newsletter to always be updated of our latest news!