Order matching system
An electronic order matching system matches buy and sell orders for a security on a stock market, a commodity on commodity market or matching other types of electronically traded financial instruments such as futures contracts.
Electronic order matching was introduced in the early 1980s in the United States to supplement open outcry trading (for example the then Mid West Stock Exchange (now the Chicago Stock Exchange) launched the "MAX system, becoming one of the first stock exchanges to provide fully automated order execution" in 1982).
Orders are usually entered by members of an exchange and executed by a central system that belongs to the exchange. The algorithm that is used to match orders varies from system to system.
In modern trading, the order matching system is often part of a larger electronic trading system which will usually include a settlement system and a central securities depository. These services may or may not be provided by the organisation that provides the order matching system.
- Open outcry
- Electronic communication network
- Alternative trading system
- Multilateral trading facility
- "History:Chicago Stock Exchange Historical Timeline". Retrieved November 2015.
- Commodity Exchange Act Cea: Issues Related to the Regulation of Electronic Trading by Thomas J. McCool, Cecile O. Trop 2000 ISBN 0-7567-0329-8 page 18
- "Matching Algorithms". CME Group. Retrieved November 2015.