18 June 2022 1:19

How are market orders matched?

The matches happen when compatible buy orders and sell orders for the same security are submitted in close proximity in price and time. Generally, a buy order and a sell order are compatible if the maximum price of the buy order matches or exceeds the minimum price of the sell order.

What is the process of matching all buy and sell orders in the market?

Summary

  1. Matching orders refers to the process of entering buy and sell orders simultaneously to facilitate the trading of the security.
  2. In modern exchange markets, buy and sell orders are matched electronically.
  3. Many algorithms are available for matching buy and sell orders.

Why pre matching is important?


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