Order Matching
Order matching is a process used in financial markets to pair buy and sell orders for securities, such as stocks or bonds. When a trader wants to buy a security at a specific price, the order matching system looks for a corresponding sell order at that price or better. This ensures that trades are executed efficiently and fairly.
The order matching system is typically managed by an exchange, like the New York Stock Exchange or NASDAQ. These platforms use algorithms to quickly match orders, helping to maintain liquidity and price stability in the market. This process is crucial for enabling smooth trading activities.