November 2019
Beginner
394 pages
10h 31m
English
The exchange order book maintains all incoming buy and sell orders placed by clients. It tracks all attributes for incoming orders—prices, number of contracts/shares, order types, and participant identification. Buy orders (or bids) are sorted from the highest price (best price) to the lowest price (worst price). Bids with higher prices have a higher priority as far as matching is concerned. Bids at the same price are prioritized depending on the matching algorithm. The simplest FIFO (First In First Out) algorithm uses the intuitive rule of prioritizing orders at the same price in the order in which they came in. This will be important later on when we discuss how sophisticated trading algorithms use speed and intelligence ...