Order matching system: Difference between revisions

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The trading mechanism on electronic exchanges is an important component that has a great impact on the efficiency and [[Market liquidity|liquidity]] of financial markets. The choice of matching algorithm is an important part of the trading mechanism. The most common matching algorithms are the ''Pro-Rata'' and ''Price/Time'' algorithms.

Comparison of Price/Time and Pro-Rata Following are few basic remarks about the two basic algorithms and their comparison. <ref>{{Citecite webdocument |urllast1=https://pdfs.semanticscholar.org/6d92/0528fc5a3a25cb7a627b93ae3e7d5789bde8.pdfJanecek |archive-urlfirst1=https://web.archive.org/web/20181215022041/https://pdfs.semanticscholar.org/6d92/0528fc5a3a25cb7a627b93ae3e7d5789bde8.pdfKarel |url-statuslast2=deadKabrhel |archive-datefirst2=December 15, 2018Martin |title=Matching Algorithms of International Exchanges |websites2cid=pdfs.semanticscholar.org13969809 |dateciteseerx=December 10.1,.1.192.6947 2007}}</ref>

|author=Karel Janeˇcek and Martin Kabrhel |access-date=2018-12-14}}</ref>

===Price/Time algorithm (or First-in-First-out)===